Question

In elimination entry (E) on the consolidation working paper at the date of acquisition, the credit to Investment in S is:

1) 75,000,000
2) 150,000,000
3) 60,000,000
4) Cannot be determined

Answer 1

Without additional information on the parent company's original investment or the percentage ownership acquired, it is not possible to determine the correct credit amount to Investment in Subsidiary (S) at the date of acquisition in the consolidation working papers.

Step-by-step explanation:

The subject of this question revolves around the consolidation working papers typically used in accounting to combine the financial statements of a parent company with its subsidiaries. At the date of acquisition, these working papers help to eliminate any investments the parent company made in the subsidiary to not double-count the subsidiary's assets and income. The question provided, however, does not include enough information to ascertain the value that should be credited to the Investment in Subsidiary (S) account. Therefore, based on the information given, we cannot determine the correct credit amount without additional context such as the original investment amount or the percentage ownership acquired.