In: Accounting
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
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 | ||