A Parent Company Regularly Sells Merchandise to Its 80%-Owned Subsidiary

question 25

Multiple Choice

A parent company regularly sells merchandise to its 80%-owned subsidiary. Which of the following statements describes the computation of noncontrolling interest income?

• A) the subsidiary's net income times 20%.
• B) (the subsidiary's net income x 20%) + unrealized profits in the beginning inventory - unrealized profits in the ending inventory.
• C) (the subsidiary's net income + unrealized profits in the beginning inventory - unrealized profits in the ending inventory) × 20%.
• D) (the subsidiary's net income + unrealized profits in the ending inventory - unrealized profits in the beginning inventory) × 20%.

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Definitions:

Self-concept

An individual's understanding and assessment of their own abilities, personality, and value.

Extraversion

A personality trait characterized by outgoing, energetic behavior, often associated with seeking out social interactions.

Hans Eysenck

a German-born British psychologist known for his work in the fields of personality, intelligence, and psychological assessment. He is especially noted for his studies on the genetic basis of personality.

Non-assertive

Non-assertive behavior is characterized by a lack of self-confidence and failure to stand up for one's rights or express one's needs, opinions, and feelings effectively.