In Years Subsequent to the Year a 90% Owned Subsidiary

question 13

Multiple Choice

In years subsequent to the year a 90% owned subsidiary sells equipment to its parent company at a gain, the noncontrolling interest in consolidated income is computed by multiplying the noncontrolling interest percentage by the subsidiary's reported net income:

• A) minus the net amount of unrealized gain on the intercompany sale.
• B) plus the net amount of unrealized gain on the intercompany sale.
• C) minus intercompany gain considered realized in the current period.
• D) plus intercompany gain considered realized in the current period.

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Definitions:

Cent

A monetary unit that is equal to one hundredth of the basic unit of currency in many countries, including the United States.

Accurate

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Cent

A Cent is a monetary unit that represents one hundredth of the base unit of currency in many countries, such as the United States dollar, Euro, and others.

Decimal Equivalent

A fraction or percentage expressed as a decimal number.