ExpertMedium1 markShort Answer
ACCA · Question 40 · Preparing simple consolidated financial statements
Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000.
What is the value of the Non-Controlling Interest (NCI) at the year-end (31 Dec 20X5)? (Enter numbers only)
Scenario: TechNova PLC acquired 80% of CyberNetix Ltd on 1 Jan 20X5 for $500,000 cash. At acquisition, CyberNetix's retained earnings were $200,000 and share capital was $100,000. NCI fair value at acquisition was $120,000. During 20X5, TechNova sold goods to CyberNetix for $80,000 (25% mark-up on cost). Half remained in inventory at year-end (31 Dec 20X5). CyberNetix's 20X5 profit was $150,000.
What is the value of the Non-Controlling Interest (NCI) at the year-end (31 Dec 20X5)? (Enter numbers only)
How to approach this question
NCI at year-end = NCI at acquisition + NCI share of post-acquisition profit.
Full Answer
NCI at year-end = NCI at acquisition ($120,000) + NCI share of post-acquisition profit ($30,000) = $150,000.
Common mistakes
Calculating 20% of the year-end net assets, which ignores the fair value method used at acquisition.
Practice the full ACCA FA — Financial Accounting Practice Exam 2
65 questions · hints · full answers · grading
More questions from this exam
Q01BioGenix Ltd, a biotech startup, is deciding whether to disclose a highly uncertain contingent li...EasyQ02Which of the following bodies is primarily responsible for issuing International Financial Report...EasyQ03Which of the following are the primary responsibilities of the directors of a limited liability c...MediumQ04Titanium Forge Co, a heavy manufacturing firm, recently incurred the following costs:
1. $50,000 ...MediumQ05A company makes a 1 for 4 bonus issue of shares. The nominal value of the shares is $1. The compa...Medium