Donna Co acquired 80% of the equity share capital of Ben Co. On 1 January 2014 when the retained earnings of Ben Co were $90,000. The fair value of the non-controlling interest at this date was $45,000. At 31 December 2014, the equity capital of Ben Co was as follows:
| $ | |
| Share Capital | 30,000 |
| Share Premium | 7,500 |
| Retained earnings | 107,500 |
| 145,000 |
During the year Ben Co sold goods to Donna for $40,000. This price included a mark-up of $8,000 for profit. At 31 December 2014, 50% of these goods remained unsold in the inventory of Donna Co.
What is the value of the non-controlling interest in the Donna group at 31 December 2014 for the purpose of preparing the consolidated statement of financial position?
Suggested solutions:
| $ | |
| Retained Earnings 31 December 2014 | 107,500 |
| Retained Earnings 1 January 2014 | 90,000 |
| Profit for the year | 17,500 |
| Unrealised profit intra company | 4,000 |
| Adjusted Profit for the year | 13,500 |
| 20% share of NCI | 2,700 |
| Add Fair Value of NCI | 45,000 |
| NCI in Donna Group | 47,700 |
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2015 ACCA F3 CONSOLIDATED NCI