Question Two: (8 marks) (B1, C1)

Part A: (4 marks)

During 2019, X company (the 90%-owned subsidiary) sold merchandize to Y Company (the subsidiary) at selling price $80,000, the cost of goods sold $60,000. During 2020, Y Company sold the merchandise at $100,000. Net income for Y Company for 2019 and 2020 respectively: $120,000; $140,000. There is no dividend.

Instructions:

1. Calculate the Parent company from the subsidiarys net income? (1 marks)
2. Calculate the Minority interest from the subsidiarys net income? (1 marks)
3. Prepare the working paper in Journal entries format for 2015 and 2016? (2 marks)