1. When the parent company lends money to the subsidiary company, the interest expense is ________ the subsidiary’s income distribution schedule and the interest revenue is ________ the parent’s income distribution schedule.
a. not added in, not deducted in
b. added in, not deducted in. => incorrect
c. not added in, deducted in
d. added in, deducted in
2. The gross profit on beginning inventory of merchandise sales from the subsidiary to the parent needs to be
a. Added to the income distribution schedule of the parent. => incorrect
b. Deducted from the income distribution schedule of the subsidiary
c. Deducted from the income distribution schedule of the parent
d. Added to the income distribution schedule of the subsidiary