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Question 1. A subsidiary sold a depreciable asset to the parent company at a profit in the current period. Will the income assigned to the noncontrolling interest in the consolidated income statement for the current period be more than, less than, or equal to a proportionate share of the reported net income of the subsidiary? Why?
Question 2. A subsidiary sold a depreciable asset to the parent company at a profit in the current period. Will the income assigned to the noncontrolling interest in the consolidated income statement for the current period be more than, less than, or equal to a proportionate share of the reported net income of the subsidiary? Why
Question 3. A subsidiary sold a depreciable asset to the parent company at a profit of $1,000 in the current period. Will the income assigned to the noncontrolling interest in the consolidated income statement for the current period be more if the intercorporate sale occurs on January 1 or on December 31? Why?
Question 4:
A) How will the elimination of unrealized intercompany inventory profits recorded on the parent's books affect consolidated retained earnings?
B) How will the elimination of unrealized intercompany inventory profits recorded on the subsidiary's books affect consolidated retained earnings?