12. Company P purchased an 80% interest in Company S on January 1, 20X3, at a price in excess of book value, such that a patent arises in the consolidation process. As a result of amortizing the patent on the consolidated income statement, an adjustment would be required in which section of the consolidated statement of cash flows?

	a. Operating Investing Financing Nothing No No Yes No
	b. Operating Investing Financing Nothing No Yes No No
	c. Operating Investing Financing Nothing No No No Yes
	d. Operating Investing Financing Nothing Yes No No No

15. Which of the following is not true regarding diluted earnings per share (DEPS) when the subsidiary has outstanding dilutive securities which may require the issuance of subsidiary company shares only?

a. The controlling interests share of net income is divided by the number of outstanding parent shares.

b. The calculation of consolidated DEPS becomes a two-stage process where the DEPS of the subsidiary must first be calculated.

c. The DEPS of the subsidiary is a component of the calculation of consolidated DEPS.

d. Both the income of the parent and subsidiary would be the income as shown in their respective income distribution schedules, except for the inclusion of the parents share of subsidiary income.