Belzer Co Owns 70% of Sabo Ltd

question 11

Multiple Choice

Belzer Co. owns 70% of Sabo Ltd. At the beginning of 20X7, Sabo sold a piece of equipment to Belzer for a gain of $35,000. At that time, the equipment had an estimated useful life of seven years.
-Which of the following statements is true about calculating the NCI for the consolidated SFP?

• A)The unrealized profit at the end of 20X7 must be deducted from the subsidiary's net carrying value before calculating the NCI.
• B)The unrealized profit at the end of 20X7 must be added to the subsidiary's net carrying value before calculating the NCI.
• C)The unrealized profit does not affect the NCI calculation because this is an upstream sale.
• D)There is no unrealized profit in the transaction.

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Socially Constructed

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