[kamo7293]

The mistake youve done is in the first working.
When working out the Fair value of the Net assets of the subsidiary, you subtract the total Assets at reporting date with their value at acquisition.

$000s
At Rep date
RE 800
Res 100
Total 900

At Acq’n
RE 700
Res 0
Total 700

900-700 = 200 is the post acquisition profits of the sub

NCI=
NCI at acq’n = 45
ADD: NCI% x S’s post acq’n profits = 10
(5%*200)
NCI = 55 000

[kamo7293]

Thank you. I couldnt understand as well. the answers in the back does not explain why the issue costs are added to retained earnings

[kamo7293]

Thank you for responding.
I hope you do get the time to do so, the first one helped me a lot in understanding how to answer the questions using the exam program. I try to complete all the Exam prep questions using the blank worksheet online.

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