Reference no: EM132911056

Problem 1: Wallaby Ltd, an ultimate parent reporting entity, holds a 30% interest in the voting shares of Wombat Ltd. Equity accounting is applied to the interest held in Wombat Ltd. During the first year of holding the investment Wombat Ltd paid a dividend of $24,000. The appropriate consolidation adjusting journal required in the first year, in respect of the dividend paid by Wombat Ltd will include an adjustment to the Investment in Wombat Ltd of how much:

a. Increase of $7,200.00;
b. Increase of $24,000.00.
c. Decrease of $7,200.00;
d. Decrease of $24,000.00;