A 90% Owned Subsidiary Sold Merchandise at a Profit to Its

question 37

Multiple Choice

A 90% owned subsidiary sold merchandise at a profit to its parent company near the end of 2013.Under the partial equity method, the workpaper entry in 2014 to recognize the intercompany profit in beginning inventory realized during 2014 includes a debit to

• A)Retained Earnings - P.
• B)Noncontrolling interest.
• C)Cost of Sales.
• D)both Retained Earnings - P and Noncontrolling Interest.

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