A Parent and Its 80 Percent-Owned Subsidiary Have Made Several

question 37

Multiple Choice

A parent and its 80 percent-owned subsidiary have made several intercompany sales of noncurrent assets during the past two years.The amount of income assigned to the noncontrolling interest for the second year should include the noncontrolling interest's share of gains:

• A)unrealized in the second year from upstream sales made in the second year.
• B)realized in the second year from downstream sales made in both years.
• C)realized in the second year from upstream sales made in both years.
• D)both realized and unrealized from upstream sales made in the second year.

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Definitions:

Distribution of Securities

The process of making securities available to investors, typically through sale, in accordance with regulatory requirements.

Underwriter

A professional or company that assesses and assumes risk on behalf of clients, often seen in insurance, securities, and loan industries.

Open-Market Trader

An individual or entity that buys and sells securities, commodities, or other goods in the open market, adhering to the principles of supply and demand.

Tippee

A person who receives undisclosed privileged information about a corporation from an insider.