A parent sells land costing $4,000,000 to a subsidiary in 2019 for $4,500,000. The parent owns 80% of the subsidiary. Suppose the subsidiary sells the land to an outside party in 2021 for $5,200,000. What is the effect of the $500,000 intercompany profit confirmed in the year of sale to the outside party on Equity in Net Income and the 20% Noncontrolling Interest in Net Income?

Select one:

a. Add $500,000 to Equity in Net Income; No effect on the 20% Noncontrolling Interest in Net Income

b. Add $500,000 to Equity in Net Income; Add $100,000 to the 20% Noncontrolling Interest in Net Income

c. Add $400,000 to Equity in Net Income; No effect on the 20% Noncontrolling Interest in Net Income

d. Add $400,000 to Equity in Net Income; Add $100,000 to the 20% Noncontrolling Interest in Net Income