Reference no: EM133010323

Question - Part A - Remix Ltd acquired 80% of the issued capital of Solve Ltd on 1 July 2019. At acquisition date Solve Ltd's accounting records included the following balances: Share Capital $275,000, Asset Revaluation Surplus $67,000, and Retained Earnings $160,000. All identifiable assets and liabilities of Solve Ltd are recorded at fair value and Remix Ltd uses the partial goodwill method.

The balance of retained earnings at 1 July 2020 is $220,000 and Solve Ltd makes a profit after tax of $65,000 in the year ended 30 June 2021. The tax rate is 30%.

Required - Prepare the NCI journal entries for the consolidation worksheet at 30 June 2021 demonstrating the step approach. Note: The acquisition analysis and parents journal entries are not required.

Part B - Remix Ltd acquired 80% of the issued capital of Solve Ltd on 1 July 2019. The following transactions took place during the periods following.

In May 2021, Solve Ltd sold inventory costing $56,000 to Remix Ltd for $75,000. Three quarters of this inventory is on-sold externally by 30 June 2021.

Solve Ltd paid a final dividend of $50,000 on 30 June 2021.

Required - Do adjusting journal entries for the consolidation worksheet at 30 June 2021. The tax rate is 30%. Note: NCI allocation journals are required if necessary.

Part C - Calculate the NCI share of equity at 30 June 2021 taking into account the information in Parts A and B above. Clearly show all workings.