The Net Incomes for Parent and Sub Inc for the Year

question 34

Multiple Choice

The Net Incomes for Parent and Sub Inc for the year ended July 31, 2012 were $120,000 and $60,000 respectively. Assuming that Parent Inc. purchased 80% of Sub's voting shares on the date of acquisition (August 1, 2012) for $180,000, what would be the amount of the Non-Controlling Interest on the date of acquisition if the Entity Method were used?

• A) $26,000
• B) $38,000
• C) $45,000
• D) $104,000

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Definitions:

Simultaneous Game

A scenario in which players make decisions or choose strategies at the same time without knowledge of the other players' choices.

Equilibrium

A state in a market where supply equals demand, causing prices to stabilize and transactions to occur without excess supply or demand.

Sequential Game

A strategic game in which players make decisions one after another, allowing for the observation of preceding choices.

Monopolized

A condition where a single seller controls the whole supply of a product or service, often resulting in limited choices for consumers and potential for higher prices.