Asked by
Samantha Carron
on Nov 25, 2024
Verified
What effect will the rent of $10,000 charged by the Subsidiary to the Parent Company have on the calculation of the non-controlling interest in the net income of the Subsidiary? The Parent Company owns 80% of the Subsidiary.
A) The non-controlling interest will decrease by $10,000.
B) The non-controlling interest will decrease by $8,000.
C) There is no effect on the non-controlling interest.
D) The non-controlling interest will increase by $10,000.
Non-Controlling Interest
A portion of the equity in a subsidiary not held by the controlling company, often representing the share of minority shareholders.
Net Income
The total profit or loss of a company after all expenses, taxes, and costs have been subtracted from total revenues.
Subsidiary
A company that is controlled by another company, typically through majority share ownership.
- Acquire knowledge on how transactions within subsidiaries influence the non-controlling interest.
Verified Answer
CS
Learning Objectives
- Acquire knowledge on how transactions within subsidiaries influence the non-controlling interest.