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Romeo acquired 90% of the equity share capital of Juliet on 1 July 2020. Juliet sold $5m of goods on 31
October 2020 making a profit of $2m. One quarter of these goods remain in inventory at the reporting date.
For the year-ended 31 December 2020, Romeo made profits of $85,600,000 and Juliet made profit so
£25,400,000.Calculate the profit attributable to the equity shareholders of Romeo to appear in the consolidated
statement of profit or loss for the year ended 31 December 2020I am kinda lost with this qn.Pls help
Hi,
It is a bit tricky but approach it as if it were a full consolidation question, i.e. use a column format. You have the profits of each of the parent and subsidiary, which we will add together as we have control. You then need to look at the profits of the subsidiary and make any adjustment, so that you can then calculate the NCI. Once you have the NCI then you can deduct this from the group profit for the year to get the profit attributable to the equity shareholders.
Give it a try, let me know how you get on and then we can see how you’ve got on.
Thanks
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