ADVANCED ACCOUNTING WEEK 4 PRACTICE QUESTIONS (1 THROUGH 7) CHAPTERS 3 \& 5 1. The Noncontrolling Interest in Net Income (NCINI) and the Noncontrolling Interest in Net Assets (NCINA) accounts included in the parent company's equity method journal entries. A. True B. False 2. If the parent company owns 90% of the subsidiary's stock, only 90% of the subsidiary's net income, dividends and amortization of Excess Value will be included in the parent company's equity method journal entries. A. True B. False 3. Noncontrolling Interest in Net Income (NCINI) is shown as a deduction (a normal debit balance) on the consolidated income statement. A. True B. False 4. Noncontrolling Interest in Net Assets (NCINA) is shown as a deduction (a normal debit balance) on the consolidated balance sheet in the equity section. A. True B. False 5. P Co. owns 80% of S Corp. P Co. declares \& pays $50,000 of dividends. S Corp. declares \& pays $40,000 of dividends. Consolidated dividends will be reported at: A. $50,000 (100\% of P Co. only) B. $90,000(100% of P Co. +100% of S. Corp.) C. $32,000 (80\% of S Corp. only) D. $82,000 ( 100% of P Co. +80% of S. Corp.) 6. PCo. acquires 80% of S Corp. on JAN 1. NCINA on that date amounts to $100,000. S Co. reports $300,000 of net income \& pays $40,000 in dividends. DEC 31 NCINA is reported at: A. $100,000 B. $152,000[$100,000+(20%($300,000$40,000))] C. $160,000[$100,000+(20%$300,000)] D. $92,000[$100,000(20%$40,000)] 7. P Co. acquires 80% of S Corp. on JAN 1. NCINA on JAN 1 is $100,000. S Co. reports $300,000 of net income \& pays $40,000 in dividends. Amort of EV is $50,000. DEC 31 NCINA is: A. $152,000[$100,000+(20%($300,000$40,000))] B. $160,000[$100,000+(20%$300,000)] C. $92,000[$100,000(20%$40,000)] D. $142,000[$100,000+(20%($300,000$50,000$40,000))]