Reference no: EM133021670
Question - On July 1 2015, Adelaide Ltd acquired 80% of the share capital of National Ltd for $500,000. The fair value of the non-controlling interest at 1 July 2015 was $97,000. At the date of acquisition, the total for shareholders' equity in National Ltd was made up as follows:
Share Capital $300,000
Retained Earnings 100,000
General Reserve 50,000
Asset Revaluation Surplus 30,000
At the date of acquisition, all the identifiable assets and liabilities of National Ltd were recorded at amounts equal to fair value. The following information is relevant to preparing the consolidated financial statements for the year ended 30 June 2016:
-During the year ended 30 June 2016, National Ltd recorded a profit of $70,000 (net of tax).
-On 1 July 2015, National Ltd sold a motor vehicle to Adelaide Ltd for $25,000. This had a carrying amount to National Ltd of $20,000. Both entities depreciate motor vehicles at a rate of 20% p.a. on cost.
-On 1 November 2015, National Ltd sold inventory costing $5,000 to Adelaide Ltd at a transfer price of $13,000. One quarter of this inventory was still unsold at 30 June 2016. This inventory was sold during July 2016.
-In December 2015, National Ltd paid a $20,000 dividend.
-Assume that the tax rate is 30%. What is the amount of the non-controlling interest in National Ltd as at 30 June 2016?
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