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Rooney co acquired 70% of the equity share capita of Marek Co, its subsidiary, on 1 January 20X6. The fair value of the non-controlling interest in Marek Co at acquisition was $1.1m. At that date thye fair values of Marek Co’s net asset were equal to their carrying value amounts, except for the building which had a fail value of $1.5m above it’s carrying amount and 30 years remaining useful life.
During the year to 31 December 20X6 Marek Co sold to Rooney Co. giving rise to an unrealised profit in inventory of $550,000 at the year end. Marek Co’s profit after tax for the year ended 31 December 20X6 was $3.2m
What amount will be presented as NCI in the cosolidated statement of financial position of Rooney as at 31 December 20X6. end
My question is, on the working for they have divided building ie 1.5/50 and not 30 years remaining period. Was it a mistake? .
The question is from ACCA number 12 September CBEThanks, other issues i know through your notes.
I cannot begin to imagine where you have found the figure of 50 years!
This is the answer according to the ACCA website:
1,100 FV of NCI at acquisition
3,200 Profit for year x 30%
( 50) Depn on FVA (1·5m/30)
( 550) Unrealised profit
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2,600 x 30% 780
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1,880
––––––Where did you find 50 years? The answer clearly shows depreciation as 1.5m / 30!
OK?
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