Question: Subsidiary Company S is 80 owned by Company P Company
Subsidiary Company S is 80% owned by Company P. Company S sold a machine with a book value of $100,000 to Company P for $150,000. The asset has a 5-year life and is depreciated under the straight-line method. The president of Company S thinks it has scored a $50,000 immediate profit for the noncontrolling interest. Explain how much profit the noncontrolling interest will realize and when it will be awarded.
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