Assuming the situation in CQ5.10 , group depreciation expense in each subsequent year of sale will

(a) Not be subject to any adjustment. True/False

(b) Be the sum of the parent’s and subsidiary’s depreciation adjusted downwards for the depreciation. True/False

(c) Be the sum of the parent’s and subsidiary’s depreciation adjusted upwards for the depreciation. True/False

Data from CQ5.10

 If a subsidiary sells equipment to its parent and recognizes a loss on sale in the previous year and the loss is not indicative of an impairment loss, which of the following is true? True/False

(a) A consolidation adjustment to reduce retained earnings and fixed assets is required.

(b) A consolidation adjustment to reduce gain on sale and fixed assets is required.

(c) A consolidation adjustment to increase retained earnings and fixed assets is required.