The Net Incomes for Parent and Sub Inc for the Year

question 7

Multiple Choice

The Net Incomes for Parent and Sub Inc for the year ended July 31, 2012 were $120,000 and $60,000 respectively. What would be the amount of Non-Controlling Interest appearing on the Consolidated Balance Sheet on the date of acquisition (August 1, 2012) , under the Parent Company Method, assuming once again that Parent purchased 80% of Sub Inc. for $180,000?

• A) $26,000
• B) $72,000
• C) $86,000
• D) The answer cannot be determined from the information given.

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Definitions:

Altruism

The behavior of an individual that benefits another at its own expense, observed in various species as a part of social interaction.

Female Aphids

Asexual or sexual reproductive females of the aphid species, known for their ability to produce offspring without mating in some cases.

Territoriality

A behavioral pattern in animals involving the establishment and defense of a territory to claim exclusive use of resources within it.

Dominance Hierarchy

A social structure in animal groups where individuals are ranked according to their access to resources or dominance.