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Prepared the journal entry related to the $2,331 million Net Income Attribute to Noncontrolling Interest. Is...

Prepared the journal entry related to the $2,331 million Net Income Attribute to Noncontrolling Interest. Is this journal entry recorded in the books of the parent or subsidiary? Is this amount equal to the subsidiary net income multiplied by the proportionate ownership of the noncontrolling interest?

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Expert Solution

Prepared the journal entry related to the $2,331 million Net Income Attribute to Noncontrolling Interest

While passing the journal entry for consolidation of the financial statements, we should credit Non Controlling Interest A/c with the Net Income Attribute to Noncontrolling Interest along with the percentage of net assets attributable to the minority share holders.

Example of the Journal Entry:

Share capital A/c Dr

Retained Earnings A/c Dr

To Investment in subsidiary A/c

To Non Controlling Interest A/c  

Is this journal entry recorded in the books of the parent or subsidiary?

This journal entry is recorded in the books of the parent as the parent company is the one carring out the consolidation.

Is this amount equal to the subsidiary net income multiplied by the proportionate ownership of the noncontrolling interest?

Yes, the net amount is calculated by multiplying the net income with the proportionate ownership of the noncontrolling interest.

ekkarill92 answered 1 year ago
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