If the shareholders' equity allocated to the subsidiary's preference shares amounts to $240,000 and the parent company acquires 60% of the subsidiary's preference shares at a cost of $150,000, how much will the non-controlling interest in the preferred shares amount to after the purchase by the parent?
A) $90,000
B) $96,000
C) $120,000
D) $240,000

Question

Quizplus · Accepted Answer

The total equity allocated to the subsidiary's preference shares is $240,000. 
The parent company acquires 60% of the preference shares, which is 0.6 x $240,000 = $144,000 of the equity. 
Therefore, the non-controlling interest in the preference shares will be $240,000 - $144,000 = $96,000.

If the Shareholders' Equity Allocated to the Subsidiary's Preference Shares