Tamer Limited is a subsidiary of Wallen Limited. When Wallen acquired its 60% interest, the retained earnings of Tamer Limited were $20 000. At the beginning of the current period, Tamer Limited's retained earnings had increased to $50,000. Tamer earned net income of $10 000 during the current period. The share of the non-controlling interest in the equity of Tamer Limited at the reporting date is:
A)$24,000
B)$32,000
C)$36,000
D)$48,000

Question

Quizplus · Accepted Answer

The non-controlling interest (NCI) share in the equity of Tamer Limited at the reporting date can be calculated as follows: The NCI owns 40% of Tamer Limited (100% - 60% = 40%). The retained earnings at the beginning of the period were $50,000, and the net income earned during the period was $10,000, making the total equity attributable to the NCI at the end of the period $60,000 (retained earnings + net income). Therefore, the NCI's share is 40% of $60,000, which equals $24,000.

Tamer Limited Is a Subsidiary of Wallen Limited