A parent owns 80% of its subsidiary and sells merchandise to its subsidiary at a 25% markup on cost. The subsidiary's ending inventory includes $825,000 purchased from the parent. The subsidiarys beginning inventory includes $750,000 purchased from the parent. What is the effect of the above on the parents equity in net income of the subsidiary for the current year?

a. No effect

b. $12,000 decrease

c. $15,000 decrease

d. $12,000 increase

32. A parent owns 80% of its subsidiary. The subsidiary sells merchandise to its parent at a 25% markup on cost. The parents ending inventory includes $825,000 purchased from the subsidiary. The parents beginning inventory includes $750,000 purchased from the subsidiary. What is the effect of the above on the noncontrolling interest in net income for the current year?

a. No effect

b. $ 3,000 increase

c. $15,000 increase

d. $ 3,000 decrease

33. A parent owns 80% of its subsidiary. At the beginning of the current year, the subsidiary sells equipment carried on its books at $100,000 to its parent for $120,000. The equipment has a 10-year remaining life, straight-line. What is the effect of the above on the noncontrolling interest in net income for the current year?

a. $3,600 decrease

b. $4,000 decrease

c. $400 increase

d. No effect

34. A parent owns 80% of its subsidiary. At the beginning of the current year, the parent sells equipment carried on its books at $40,000 to its subsidiary for $50,000. The equipment has a 2-year remaining life, straight-line. What is the effect of the above on equity in net income for the current year, reported on the parents books, assuming the parent uses the complete equity method?

a. $8,000 decrease

b. $4,000 decrease

c. $5,000 decrease

d. No effect

35. A parent owns 80% of its subsidiary. At the beginning of 2019, the subsidiary sells equipment carried on its books at $40,000 to its parent for $50,000. The equipment has a 5-year remaining life, straight-line. What is the effect of the above on the noncontrolling interest in net income, reported on the consolidated income statement for 2020?

a. $800 increase

b. $400 increase

c. $1,200 decrease

d. No effect