Task 4 – Question 37 – Mock exam 3 BPP F3/FA book

Task 4-

Sapphire’s profit for the year was $45,500.During the year, Matlock sold goods to
Sapphire. Asa result, inventories in the consolidated statement of financial position have
been reduced to reflect unrealised profit of $5,000.

How much of the non-controlling interests (NCI) figure that appears in the consolidated
statement of profit or loss for the year relates to NCI in Sapphire Co, for the year ended 30
June 20X9?

Answer: NCI = 45,500 x 9/12 x 40% = $13,650.
The intragroup sales were from the parent to the subsidiary and so the unrealised profit is in the parent, which does not affect the NCI.

1. There is no Sapphire mentioned but why is it still questioned?
2. Assuming Sapphire is Rugby, why is 45,500 multiplied by 9/12 and 40%?

Hope you help me. This is tricky 🙁