Consolidates SOPL

Dear John,

I am maybe getting confused with intra-group trading and NCI.

Question: J Co owns 75% of P Co. Profits for the year:

J Co: $1,200m P Co: $780

J Co sold goods to P Co for $5m (cost $3m, profit $2m). Half of these goods remained in P Co inventory.

First problem: I thought that if the parent company sells goods to the Subsidiary, we do not need to deduct the unrealised profit when calculating NCI,s profit as the parent made the profit.
Second problem: I thought NCI’s profit would be calculated by 25% of 780 not the group profit.

According to the BPP Book the answer is :
(Group profit for the year is $1,979M)

Profit attributable to:
Owners of the parent 1,484.5
NCI (25% x 1979)-0.25 494.5

I calculated as NCI 25% x 780.

Please help

many thanks