If the Shareholders' Equity Allocated to the Subsidiary's Preference Shares

question 42

Multiple Choice

If the shareholders' equity allocated to the subsidiary's preference shares amounts to $240,000 and the parent company acquires 60% of the subsidiary's preference shares at a cost of $150,000, how much will the non-controlling interest in the preferred shares amount to after the purchase by the parent?

• A) $90,000
• B) $96,000
• C) $120,000
• D) $240,000

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Definitions:

Depreciation

The process of allocating the cost of tangible assets over their useful lives for accounting and tax purposes, reflecting the asset's consumption, wear and tear.

Maintenance

The act of keeping property or equipment in good repair and working condition through regular upkeep and repairs.

Utilities

Services such as water, electricity, gas, and sewer services that are essential for the operation of homes and businesses.

Depreciation

The method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or obsolescence.