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Dear Sir,
Thanks you for your effort.Your lectures are really helpful.For me personally I prefer to watch your lectures than taking tuition.
I am a bit confusing about a question in BPP books:
(1) Black acquired 70% of Bury ordinary shares….
Black Burry
Profit for the year 31750 15000During the year ended Black sold goods to Bury which originally cost $12 million @40% mark up…Bury still have 30% of these goods in its inventory at the end of the year
cost $12000
Markup $4800
SP $16800Unrealised profit = $4800 X 0.3 = $1440
Prepare consldated st of profit and loss
Profit for the year $ 38310
The profit was correct.
Profit attributable to :
Owner (31750 + (15000*0.7) – (0.7 * 1440) = 41242
Non controlling Interest (15000*0.3)-(1440*0.3) = 4068Please help me to understand why my profit attribute section is wrong
Thank you
It is Black who sold the goods to Bury, and so even though it is Bury who still has the items in inventory it was Black who had taken the profit on them when they sold them to Bury.
So when calculating the profit attributable part, all of the PURP comes off Black’s profit, not Bury’s. So the profit attributable to the NCI is their share of all of Bury’s profit.
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