When Comparing the Difference Between an Upstream and Downstream Transfer

question 29

Multiple Choice

When comparing the difference between an upstream and downstream transfer of inventory,and using the initial value method,which of the following statements is true?

• A)Income from subsidiary will be lower by the amount of the beginning inventory profits multiplied by the noncontrolling interest percentage for upstream transfers.
• B)Income from subsidiary will be higher by the amount of the beginning inventory profits multiplied by the noncontrolling interest percentage for upstream transfers.
• C)Income from subsidiary will be reduced for downstream ending inventory profits but not for upstream profits,before the noncontrolling interest.
• D)Income from subsidiary will be reduced for upstream ending inventory profits but not for downstream profits,before the noncontrolling interest.
• E)Income from subsidiary will be the same for upstream and downstream profits.

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