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:

Hemophilia A

A genetic disorder caused by deficient or defective clotting factor VIII, leading to excessive bleeding and difficulty clotting after injury.

Clotting Ability

The capacity of the blood to form clots, a critical process in stopping bleeding and beginning repair of damaged tissues.

Homozygous Dominant

Refers to an individual having two copies of the same dominant allele for a particular gene.

Cystic Fibrosis Allele

A variant form of a gene associated with the genetic disorder cystic fibrosis, which affects the respiratory and digestive systems.