How much do these adjustments affect net income

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Question - Keene Corp. owns 80% of Daum LLC. In 2019, Keene sold 10,000 units of inventory to Daum. That inventory cost Keene $250,000 to produce and was sold to Daum for $32 per unit. Daum resold 80% of that inventory for $40 per unit in 2019. In 2020, Daum buys an additional 15,000 units from Keene for $34 per unit that originally cost $390,000 to produce. Daum sells all of its inventory in 2020 for $43 per unit. Assume Keene uses the initial value method to account for its investment in Daum. Provide the consolidation worksheet adjustments required in 2020.

Required - How much do these adjustments affect net income attributable to minority interest?

Now assume Keene uses the equity method to account for its subsidiaries. Describe how, if at all, the worksheet adjustments would differ from what you provided in question 1.

Reference no: EM132781616

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