The following consolidation adjusting journal entries appeared at the end of a period in which the parent sold all of its shareholding in a subsidiary. It received $1,200,000 for the shares.

The 'Cr Profit after tax' entry above represents:
A) the profit made by the parent on the sale of the shares.
B) the profit made by the economic entity on the sale of the shares.
C) the amount accruing to the minority interest of the subsidiary.
D) the share of profits derived by the subsidiary for the entire current period.
E) the share of profits derived by the subsidiary in the current period, up to the time of divestment.

Question

The following consolidation adjusting journal entries appeared at the end of a period in which the parent sold all of its shareholding in a subsidiary. It received $1,200,000 for the shares.

The 'Cr Profit after tax' entry above represents:
A) the profit made by the parent on the sale of the shares. 
B) the profit made by the economic entity on the sale of the shares. 
C) the amount accruing to the minority interest of the subsidiary. 
D) the share of profits derived by the subsidiary for the entire current period. 
E) the share of profits derived by the subsidiary in the current period, up to the time of divestment.

Quizplus · Accepted Answer

The Answer is E

The Following Consolidation Adjusting Journal Entries Appeared at the End