[lucasf]

64% first attempt

[lucasf]

I remember that I chose 240 (F) too

[lucasf]

Hi, write me to this address: skg0ovvl1@relay.firefox.com
(it’s an alias to avoid spam)

[lucasf]

Yes, I have. I’m pretty sure it’s an error too.

[lucasf]

P2-D2 wrote:I don’t quite follow the NCI calculation as it should be the NCI at acquisition of $150,000 plus the 20% of the post aquisition movement in reserves. I make the movement to be $300,000 ($710,000 – $410,000) but then this doesn’t then give the correct answer, and gives $210,000. It could be there is a mistake in the solution or that I’m missing something.

The correct figures to calculate NCI would’ve been:
710-460=250

It was definitely a confusing question.

[lucasf]

Well I finally understood this problem. The $710 figure includes the brand name fair value of $50 (710-50=660)

S’s NA:
at date of disposal = s/cap + reserves + brand = 100+660+50 = 810
at acq date = s/cap + reserves + brand = 100+410+50 = 560
post acquisition profits = 810-560 = 250

NCI% of post acquisition profits = 250*20% = 50

NCI figure = NCI @ acq (FV) + NCI% post acq profits = 150+50 = 200

Goodwill = 600+150-100-410-50 = 190

Gain on disposal (group accounts) = 1500-810-190+200 = 700

[lucasf]

I just spotted an error in their Goodwill calculation, it says:

600+150-410-50=190

but if you do the sum, the result is 290. They forgot to add 100 corresponding to the subsidiary’s share capital. The correct answer IS 190 though.

[lucasf]

Hi, thank you for making this question. I’m trying to solve it right now, but their NCI calculation is confusing. I will assume that it is a mistake. I arrived to the same answer that the tutor gave you.

[lucasf]

Thank you!

[lucasf]

Thank you John, I’ll take a look!

[lucasf]

Hi mermaid20, have you found somebody to study with? You can add me on whatsapp

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