A parent's beginning inventory contains $10,000 in unconfirmed profits on goods purchased from its subsidiary. The subsidiary's beginning inventory contains $8,000 in unconfirmed profits on goods purchased from its parent. The parent owns 80% of the subsidiary. By what amount is consolidated net income to the controlling interest increased by confirmation of profits on beginning inventories? a. $11,600 b. $16,000 c. $18,000 d. $14,400

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A parent's beginning inventory contains $10,000 in
unconfirmed profits on goods purchased from its subsidiary.
The subsidiary's beginning inventory contains $8,000 in
unconfirmed profits on goods purchased from its parent. The
parent owns 80% of the subsidiary.
By what amount is consolidated net income to the controlling
interest increased by confirmation of profits on beginning
inventories?
a. $11,600
b. $16,000
c. $18,000
d. $14,400
Transcribed Image Text:A parent's beginning inventory contains $10,000 in unconfirmed profits on goods purchased from its subsidiary. The subsidiary's beginning inventory contains $8,000 in unconfirmed profits on goods purchased from its parent. The parent owns 80% of the subsidiary. By what amount is consolidated net income to the controlling interest increased by confirmation of profits on beginning inventories? a. $11,600 b. $16,000 c. $18,000 d. $14,400
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