Calculating the Minority Interest (MI)in the Operating Profit and Opening

question 3

Multiple Choice

Calculating the minority interest (MI) in the operating profit and opening retained earnings of a subsidiary is done by:

• A) Taking the operating profit and opening retained earnings figures of the subsidiary and multiplying them by the percentage ownership held by the MI.
• B) Adjusting the operating profit and opening retained earnings of the subsidiary for any intragroup transactions and multiplying them by the percentage ownership held by the MI.
• C) Adjusting the operating profit of the subsidiary for any unrealised profit or expense of the subsidiary as a result of any intragroup transactions and multiplying both this and the opening retained earnings by the percentage ownership held by the MI.
• D) Adjusting the opening retained earnings and the operating profit for any unrealised profit or expense of the subsidiary as a result of intragroup transactions and multiplying this by the percentage ownership held by the MI.
• E) None of the given answers.

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Definitions:

Proportion

A statistical measure that denotes the fraction or percentage of the total that exhibits a particular trait or characteristic.

Sampling Plans

Detailed strategies that outline the selection and evaluation of a group of individuals from a statistical population to estimate characteristics of the whole population.

Random Selection

A process of choosing a sample from a population such that every individual has an equal chance of being selected.

Stratified Random Sample

A sampling method where the population is divided into subgroups (strata) that share similar characteristics, and random samples are then taken from each subgroup to ensure representation across the population's diversity.