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Hi Sir, the following question is from BPP, and I have no idea how to answer the question, please suggest. Thank you!
Premier Co acquired 80% of Sanford Co on 1 June 20X1. Sales from Sanford Co to Premier Co throughout the year ended 30 September 20X1 were consistently $1 million per month. Sanford Co made a mark-up on cost of 25% on these sales. At 30 September 20X1 Premier Co was holding $2 million inventory that had been supplied by Sanford Co in the post-acquisition period.By how much will the unrealised profit decrease the profit attributable to the non-controlling interest for the year ended 30 September 20X1?
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Amount to be reduced from Non-Controlling Interest:
$2000000 x 25/125 x 20% = $80000