The Noncontrolling Interest in Consolidated Income When the Selling Affiliate

question 9

Multiple Choice

The noncontrolling interest in consolidated income when the selling affiliate is an 80% owned subsidiary is calculated by multiplying the noncontrolling minority ownership percentage by the subsidiary's reported net income:

• A) plus unrealized profit in ending inventory less unrealized profit in beginning inventory.
• B) plus realized profit in ending inventory less realized profit in beginning inventory.
• C) less unrealized profit in ending inventory plus realized profit in beginning inventory.
• D) less realized profit in ending inventory plus realized profit in beginning inventory.

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Definitions:

Explicit Request

A direct and clear demand or appeal for something.

Deindividuation

The lessening of personal identity, self-restraint, and the sense of personal responsibility that can occur within a group.

Foot-In-The-Door Effect

A persuasive technique whereby agreeing to a small request increases the likelihood of agreeing to a second, larger request.

Polarization Phenomenon

The process where a group or individual's opinion becomes more extreme after discussion within the group, leading to more significant division.