Question
A parent has a 90% interest in its subsidiary. The subsidiary sold land at a gain to the parent in a previous year. The parent
A parent has a 90% interest in its subsidiary. The subsidiary sold land at a gain to the parent in a previous year. The parent still holds the land. How does this transaction affect equity in net income and noncontrolling interest in net income for the current year, assuming the parent uses the complete equity method to report its investment on its own books?
Group of answer choices
a. Only affects equity in net income
b. Affects equity in net income and noncontrolling interest in net income.
c. No effect
d. Only affects noncontrolling interest in net income
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