Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Juan Ltd acquired 80 percent share capital of Beach Ltd. On 1 July 2018 for a cost of $500,000. As at the date of acquisition,

Juan Ltd acquired 80 percent share capital of Beach Ltd. On 1 July 2018 for a cost of $500,000. As at the date of acquisition, all assets and liabilities of Beach Ltd fairly valued except a land that has a carrying value $50,000 less than the fair value. The recorded balance of equity of Beach Ltd as at 1 July 2018 were as: Share capital $350,000 Retained earnings $100,000 Total $450,000 Additional information: ? The management of Juan Ltd values non-controlling interest at the proportionate share of Beach Ltd identifiable net assets ? Beach Ltd has a profit after tax of $70000 for the year ended 30 June 2019 ? During the financial year to 30 June 2019, Beach Ltd sold inventory to Juan Ltd for a price of $60000. The inventory costs Beach Ltd $30000 to produce. 25 percent of the inventory are still on the hand of Juan Ltd as at 30 June 2019. ? During the year Beach Ltd paid $10000 in management fees to Juan Ltd. ? On 1 July 2018, Beach Ltd sold an item of plant to Juan Ltd $40000. The equipment had a carrying value of $30000 (Cost $50000, accumulated depreciation $20000). At the date of sale it was expected that the equipment had a remaining life of 4 years and no residual value. ? The tax rate is 30 percent. Required: (a) Based on the above information, calculate the non-controlling interest as at 30 June 2019. (7 marks) (b) Pass necessary journal entry to recognise the non-controlling interest as at 30 June 2019. (5 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Statistical Audit Automation The Principles Of Statistical Sampling Of Business Accounts

Authors: Nathan Poeschl

1st Edition

B0B17YP1SR, 979-8829041991

More Books

Students also viewed these Accounting questions

Question

a. 9.24% b. 6.69% c. 797% d. 6.25% e. 8.39%

Answered: 1 week ago