An 80%-owned subsidiary sells merchandise to its parent at a markup of 25% on cost. During the current year, the parent paid $725,000 for merchandise received from the subsidiary. By year-end, the parent has sold $600,000 of the merchandise to outside customers for $900,000, but still holds the other $125,000 in its ending inventory. What is the impact of the above information on noncontrolling interest in net income, reported on the consolidated income statement for the year? A. Subtract $25,000 B. No effect C. Subtract $20,000 D. Subtract $5,000

Because given transaction will have no impact on noncontrolling interest in net income, reported on the consolidated 2018 income statement. The markup will affect only the parent company's share in the net income reported on the consolidated 2018 income statement.

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tallinn tallinn · Answer 2 · 2022-03-24T13:45:43+01:00

According to this statement the impact of the above information on noncontrolling interest in net income, reported on the consolidated income statement for the year, The Correct option is B There has no effect.

What is an Income statement?

When The impact of the above knowledge on noncontrolling interest in net income, is reported on the consolidated income statement for the year Because In a transaction given will have no impact on noncontrolling interest in net income, informed on the consolidated 2018 income statement. Therefore, The markup will affect only the parent company's share in the net income reported on the consolidated 2018 income statement.

Therefore The Correction option is 'B'

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