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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santhosh anand · Accepted Answer

Final Answer : B, Explanation :  The total equity allocated to the subsidiary's preference shares is $240,000.The parent company acquires 60% of the preference shares, which is 0.6 x $240,000 = $144,000 of the equity.Therefore, the non-controlling interest in the preference shares will be $240,000 - $144,000 = $96,000.

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