Question: When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiarys income and reduces the income allocation to the noncontrolling

When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiary’s income and reduces the income allocation to the noncontrolling interest. Is the profit permanently eliminated from the noncontrolling interest, or is it merely shifted from one period to the next? Explain.

Step by Step Solution

★★★★★

3.45 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The deferral and subsequent recognition of intraenti... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

326-B-A-F-S (3897).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

A parent holding company sells shares in its subsidiary such that the parent now owns only 65% of the subsidiary and, thus, the tax returns of the parent and its subsidiary can't be consolidated. The...

When a parent company sells land to a subsidiary at more than book value, the consolidation elimination entries at the end of the period include a debit to the gain on the sale of land. When a parent...

When a parent sells a part of its interest in a subsidiary during an accounting period, is the income applicable to the interest sold up to the time of sale included in consolidated net income and...

When a subsidiary sells inventory to a parent, the intra-entity profit is removed from the subsidiary's net income for consolidation and reduces the income calculation to the noncontrolling interest....

When a subsidiary sells inventory to a parent, the intercompany profit is removed from the sub sidiarys income and reduces the income allocation to the noncontrolling interest. Is the profit per...

Consolidation subsequent to date of acquisition--Equity method with noncontrolling interest, AAP, and upstream intercompany inventory sale Assume, on January 1, 2013, a parent company acquired an 80%...

i need help with my uncorrect answers Question 1 Not yet answered Marked out of 100.00 P Flag question consolidation subsequent to date of acquisition Equity method with noncontrolling Interest, AAP,...

Consolidation subsequent to date of acquisition-upstream intercompany inventory sale-Equity method with noncontrolling interest, AAP, and upstream intercompany inventory sale Assume that, on January...

Consolidation subsequent to date of acquisition - Equity method with noncontrolling interest, AAP, and upstream intercompany inventory sale Assume that, on January 1, 2007, a parent company acquired...

The concept of competitive advantage is as important for not-for-profit organizations as it is for for-profit organizations. Do you agree or disagree with this statement? Explain, using examples to...

x-bar = 30, n = 25, s = 4, confidence level = 90% We have provided a sample mean, sample size, sample standard deviation, and confidence level. In each case, use the one-mean t-interval procedure to...

Which of the following factors result(s) in an express warranty with respect to a sale of goods? I. The sellers description of the goods is part of the basis of the bargain. II. The seller selects...

Distinguish recklessness from negligence. Which is punished more severely? Why?

Use the same information as presented in problem 27 but assume that Arlington pays $2,020,000 in cash. An additional $20,000 is paid in direct combination costs. For each of the following accounts,...

Merrill acquires 100 percent of the outstanding voting shares of Harriss Company on January 1, 2008. To obtain these shares, Merrill pays $200,000 in cash and issues 10,000 shares of its own $10 par...

Flaherty Company entered into a business combination with Steeley Company in March 2001. The combination was accounted for as a pooling of interests. Registration fees were incurred in issuing common...

Statistics help The Acme Pro Office service provides temporary office personnel for many corporations. They have found that 88% of their invoices are paid within 10 working days by these...

What is AEI's times-interested-earned (TIE) ratio? TIE RATIO AEI Incorporated has $5 billion in assets, and its tax rate is 40%, Its basic earning power (BEP) ratio is 10%, and its return on assets...

What is the IRR of the following set of cash flows? Year Cash Flow 0 GN- 12,022 5.700 6,700 5,100 2 3 Multiple Choice 21.34% 22.22% 21.78% 22.87% 20.69%