REQUIRED

1. Prepare a table that shows the ownership interest percentages in the two subsidiaries distinguishing between direct and indirect interests. (5 marks)

	CHILD	GRANDCHILD
PARENT-DIRECT - INDIRECT
NCI - DIRECT - INDIRECT
TOTAL OWNERSHIP INTEREST

B) Based on the information provided, prepare the consolidation journal entries necessary to allocate the non-controlling interest in Grandchild Ltd as at 30 June 2020. (NOTE: only NCI entries are required in this questions) (15 marks)

On 1 July 2018. Parent Ltd acquired 90% of the ordinary voting shares of Child Ltd which in tum acquired 60% of the ordinary voting shares of Grandchild Ltd. The fair value of the net assets of Grandchild Ltd at the date of acquisition are represented by total shareholders' equity as follows: $ Share capital 200.000 Retained profits 100,000 Total shareholders' equity 300.000 The net profits of and dividends paid by Grandchild Ltd for the two years ending 30 June 2019 and 30 June 2020 are as follows: S After tax Profit for 2019 140,000 Dividends paid for 2019 (40,000) After tax Profit for 2020 200.000 There are no are other changes in the equity for Grandchild Ltd. On 1 July 2018. Parent Ltd acquired 90% of the ordinary voting shares of Child Ltd which in tum acquired 60% of the ordinary voting shares of Grandchild Ltd. The fair value of the net assets of Grandchild Ltd at the date of acquisition are represented by total shareholders' equity as follows: $ Share capital 200.000 Retained profits 100,000 Total shareholders' equity 300.000 The net profits of and dividends paid by Grandchild Ltd for the two years ending 30 June 2019 and 30 June 2020 are as follows: S After tax Profit for 2019 140,000 Dividends paid for 2019 (40,000) After tax Profit for 2020 200.000 There are no are other changes in the equity for Grandchild Ltd