First question

According to AASB 10/IFRS 10Consolidated Financial Statements, a non-controlling interest is classified as:

Group of answer choices

A. part of the subsidiary's equity.

B. part of the consolidated group's equity.

C. part of the liability of the group.

D. part of the parent entity's equity.

Second question

Mukee Ltd holds a 55% interest in Sukee Ltd. Sukee Ltd purchased inventories from Mukee Ltd during the year for $60 000. The inventories originally cost $29 000. At the end of the year 70% of the inventories was still on hand. The tax rate was 30%. The NCI adjustments required at the year end in relation to this transaction includes a debit of which of the following?

A. Nil. We are not required to reflect the NCI's share of the subsidiary's equity with respect to this intragroup transaction.

B. Dr. NCI $6 835.50

Cr. NCI Share of profit $6 835.50

(= $31,000 x 45% x 70% x 70%) i.e. we reduce the NCI's share of the subsidiary's equity with respect to the elimination of unrealised profit upon consolidation.

C. Dr. NCI $9 765

Cr. NCI share of profit $9 765

(=$31,000 x 45% x 70%)i.e. we reduce the NCI's share of the subsidiary's equity with respect to the elimination of unrealised profit upon consolidation.

D. Dr. NCI $11 935

Cr. NCI share of profit $11 935

(=$31,000 x 55% x 70%)i.e. we reduce the NCI's share of the subsidiary's equity with respect to the elimination of unrealised profit upon consolidation.