q1. For downstream sales the total amount of unrealized gains and losses are allocated between controlling and noncontrolling interest shares

Select one:

True

False

q2. P Co owns a 80% interest in S Co, acquired several years ago at a cost equal to book value and fair value. S sells merchandise to P for loss the first time in 2019, and some is unsold at December 31, 2019. In computing income from subsidiary for 2019 under the equity method, P uses which equation?

Select one:

a. 80% of S income less 80% of the unrealized loss in P ending inventory

b. 80% of S income plus 80% of the unrealized loss in P ending inventory

c. 80% of S income plus 100% of the unrealized loss in P ending inventory

d. 80% of S income less 100% of the unrealized loss in P ending inventory