Question

In: Accounting

Beach Limited is a subsidary of Golden Limited. When Golden acquired its 70% interest in Beach,...

Beach Limited is a subsidary of Golden Limited. When Golden acquired its 70% interest in Beach, the retained earnings of Beach Limited were $40,000.

At the beginning of the current period, Beach Ltd’s retained earnings had increased to $100,000.

Beach also earned profit of $20,000 during the current period. The NCI’s share of the equity of Beach Ltd at reporting date is:   (Please provide step by step solutions, thank you!)

a. $36,000

b. $30,000

c. $6,000

d. $84,000

Solutions

Expert Solution

Working Notes:
CALCULATION OF SHARE % OF NON CONTROLLING SHAREHOLDERS
Total Shares 100%
Less: Shares acquired by Golden Limited 70%
Balance Shares is for non controlling Interest (NCI) 30%
Solution:
CALCULATION OF NON CONTROLLING INTEREST IN THE NET INCOME OF DEMERS
Earned Profit of the year $                     20,000
Add: Beginning balance of Retained Earnings $                 1,00,000
Ending balance of Retained Earnings $                 1,20,000
Share of NCI in Beach Limted 30%
Share of NCI in $ = $ 120,000 X 30% = $                     36,000
Answer = Option A = $ 36,000

ekkarill92 answered 2 years ago
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