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hi
i have question on profit attribute to owner of parentJessica co acquired 75% of share capital of patpsot on 1 January 2007. the SP&L for the two companies for the year ended 31/12/2007
Jessica co patpost co
profit for year 1200 780
Jessica sold good to patpost costing 3m to patpost 5m , at year end , 50% of these goods remained in patpost inventory.
in book , they calculate the profit attribute as :
owner of the parent = 1484.5
NC: 25% x 1980-0.25= 494.5
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1980this is how i calculate the question and i got correct answer but i don’t understand why this time i am wrong ,why NCI they calculate on actual profit?
owner of the parent = 1785
NC: 25% x 780 = 195
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1980Where did you find this question? Because assuming that you have typed it correctly then the answer in the book is nonsense.
What you have done is correct for the NCI – the amount attributable to the NCI is 195.
However the total consolidated profit is not 1,980. It is 1,979 because of the provision for unrealised profit in inventory of 1.
Therefore the profit attributable to the parent is 1,784.
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