Maxim Importing Company

question 25

Multiple Choice

Maxim Importing Company. converts its foreign subsidiary financial statements using the translation process. The company's French subsidiary reported the following for 2011: revenues and expenses of 10,500,000 and 6,505,000 francs, respectively, earned or incurred evenly throughout the year, dividends of 500,000 francs were paid during the year. The following exchange rates are available:

Translated net income for 2011 is

• A) $733,950.
• B) $805,860.
• C) $838,950.
• D) $910,860.

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Definitions:

Noncontrolling Interest

A stake in a company owned by minority shareholders that doesn’t give them control over the company's operational and financial decisions.

Noncontrolling Interest

A minority share in a subsidiary that is not enough to exert control, often reflected in the parent company's financial statements as part of equity but separate from the parent's equity.

Consolidated Balance Sheet

A financial statement that combines all the assets, liabilities, and equity of a parent company and its subsidiaries into one document.

Acquisition

The process by which one company purchases most or all of another company's shares to gain control of that company.