On consolidated working papers,a subsidiary's net income is
A)deducted from beginning consolidated retained earnings.
B)deducted from ending consolidated retained earnings.
C)allocated between the noncontrolling interest share and the parent's share.
D)only an entry in the parent company's general ledger.

Question

Quizplus · Accepted Answer

Subsidiary's net income is allocated between noncontrolling interest (representing the portion of the subsidiary not owned by the parent company) and the parent's share. This is done to reflect the subsidiary's net income in the consolidated financial statements accurately. It is not deducted from beginning or ending consolidated retained earnings, and it is not just an entry in the parent company's general ledger.

On Consolidated Working Papers,a Subsidiary's Net Income Is