Conso1idation policy and principal consolidation concepts. CAR Corporation manufactures computers in the United States. It owns 75% of the voting stock of Charles Electronics, 80% of the voting stock of Alexandre du France Software Systems (in France), and 90% of the voting stock of R Credit Corporation (a finance company). CAR Corporation prepares consolidated financial statements consolidating Charles Electronics, uses the equity method for R Credit Corporation, and treats its investment in Alexandre du France Software Systems as securities available for sale. Data from the annual reports of these companies appear next. There are no intercompany transactions.

a. Which, if any, of the companies does CAR incorrectly account for according to U.S. GAAP?
Assuming the accounting methods and accounting itself for the three subsidiaries shown above are correct, answer the following questions:
b. How much of the net income reported by CAR Corporation Consolidated results from the operations of the three subsidiaries?
c. What is the amount of the non-controlling, or minority, interest now shown on the consolidated income statement, and how does it affect net income of CAR Corporation Consolidated?
d. If CAR had consolidated all three subsidiaries, what would have been the net income of CAR Corporation Consolidated?
e. If CAR had consolidated all three subsidiaries, what non-controlling, or minority, interest would appear on the incomestatement?

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Percentage Owned Accounting Method Net Income Dividends CAR Corporation Consolidated.... Charles Electronics S 84,000 $1,200,000 Consolidated 75% 48,000 120,000 Alexandre du France Software Systems 60,000 Fair Value (Securities 80 96,000 Available for Sale) Equity R Credit Corporation. 90 144,000 120,000 "Fair value of shares exceeds acquisition cost.