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Chapter 4: Q4-4ISTQ (page 198)

The non-controlling interest section of the income statement is:

(a) required under GAAP but not under IFRS.

(b) required under IFRS but not under GAAP.

(c) required under IFRS and GAAP.

(d) not reported under GAAP or IFRS.

Short Answer

Expert verified

Option c is the correct answer.

Step by step solution

01

Meaning of Parent Company

The term parent company is used to denote an entity that holds controlling interests in other companies or companies, and controlling companies are known as subsidiaries.

02

The explanation for the correct answer

The non-controlling interest section is reported under both types of income statements, whether it is prepared under GAAP or IFRS. Both require the reporting of the same for a better understanding of the users and stakeholders for effective and efficient decision-making.

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Most popular questions from this chapter

Explain the transaction approach to measuring income. Why is the transaction approach to income measurement preferable to other ways of measuring income?

In 2017, Hollis Corporation reported net income of \(1,000,000. It declared and paid preferred stock dividends of \)250,000. During 2017, Hollis had a weighted average of 190,000 common shares outstanding. Compute Hollis’s 2017 earnings per share.

(Multiple-Step Statement with Retained Earnings Statement) Presented below is information related to Ivan Calderon Corp. for the year 2017.

Net sales $1,300,000 Write-off of inventory due to obsolescence 80,000

Cost of goods sold 780,000 Depreciation expense omitted by accident in 2016 55,000

Selling expenses 65,000 Casualty loss 50,000

Administrative expenses 48,000 Cash dividends declared 45,000

Dividend revenue 20,000 Retained earnings at December 31, 2016 980,000

Interest Revenue 7,000

Effective tax rate of 34% on all items

Instructions

  1. Prepare a multiple-step income statement for 2017. Assume that 60,000 shares of common stock are outstanding for the entire year.
  2. Prepare a separate retained earnings statement for 2017.

How should the disposal of a component of a business be disclosed in the income statement?

Question: Which of the following is not an acceptable way of displaying the components of other comprehensive income under IFRS?

(a) Within the statement of retained earnings.

(b) Second income statement.

(c) Combined statement of comprehensive income.

(d) All of these choices are acceptable.
See all solutions

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