Included in a working paper elimination (in journal entry format) for intercompany sales of merchandise was a debit to Minority Interest in Net Assets of Subsidiary. This debit indicates that:

Question

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A debit to Minority Interest in Net Assets of Subsidiary in the context of intercompany sales of merchandise indicates that a partially owned subsidiary sold merchandise to the parent company or to another subsidiary. This is because the minority interest needs to be adjusted to reflect the elimination of profits from the intercompany sale that were previously recorded.

Included in a Working Paper Elimination (In Journal Entry Format)