Past exam paper June 2015-MCQ # 11

Dear Mike,

Thanks a lot for your help in these days before exams:)

my question is why answer counts PURP and don’t include it before Nci %?

I calculated with PURP and then multiplied by 80%

Question:
Wilmslow acquired 80% of the equity shares of Zeta on 1 April 2014 when Zeta’s retained earnings were $200,000.During the year ended 31 March 2015, Zeta purchased goods from Wilmslow totalling $320,000. At 31 March2015, one quarter of these goods were still in the inventory of Zeta. Wilmslow applies a mark-up on cost of 25% toall of its sales.
At 31 March 2015, the retained earnings of Wilmslow and Zeta were $450,000 and $340,000 respectively.

Answer:

Retained earnings:
$
Wilmslow 450,000
Post acq Zeta ((340 – 200) x 80%) 112,000
URP in inventory (320,000 x ¼ x 25/125) (16,000)
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546,000
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