What is the net effect on consolidated net income in 2009,before allocation to controlling and noncontrolling interests,due to the equipment transfer?

Question

Quizplus · Accepted Answer

The equipment transfer resulted in a decrease in net income of the subsidiary by $12,000. Since the subsidiary's net income was previously included in the consolidated net income, the consolidated net income will also decrease by the same amount, resulting in a decrease of $10,000 (since $2,000 was already included in the initial calculation of consolidated net income). Therefore, choice C is the correct answer.

What Is the Net Effect on Consolidated Net Income in 2009,before