When a subsidiary company that has a minority interest (MI)declares a dividend,the treatment in the consolidated balance sheet of dividends not paid is:
A) The minority interest portion of the dividend owing should be eliminated along with the parent entity's share, leaving a zero balance in dividends payable.
B) The MI's portion should be deducted from the minority interest's share in equity. There should be no dividend amounts remaining in the consolidated balance sheet, but the amount owed to the MI should be disclosed separately.
C) The amount owing to MI as a dividend payable should be included in the consolidated balance sheet as a current liability.
D) The amount of dividends payable to both the parent entity and the MI will be reflected in the consolidated balance sheet.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The amount owing to the minority interest as a dividend payable should be included in the consolidated balance sheet as a current liability, reflecting the obligation to pay the minority shareholders their share of the declared dividends.

When a Subsidiary Company That Has a Minority Interest (MI)declares