In Order to Consolidate an 80% Interest in a Subsidiary

question 7

Multiple Choice

In order to consolidate an 80% interest in a subsidiary, the Eassie group prepared the following pre-acquisition entry. DR Retained earnings $4 000
DR Share capital $30 000
DR General reserve $6 000
CR Investment in subsidiary $40 000
The interest in equity attributable to the direct non-controlling interest is:

• A) $10 000.
• B) $32 000.
• C) $8000.
• D) $40 000.

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Definitions:

Supplies Expense

Costs associated with the consumable items used during a company's operations over an accounting period.

Journalized

The process of recording transactions in a company's journal as part of the accounting system.

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjusting entries have been made, verifying the equality of debits and credits.

Error Detection

The process of identifying inaccuracies, inconsistencies, or mistakes in financial information or accounting records.