Fleming Ltd. acquired 75% of Donner Ltd. on April 30, 20X1. Both companies have April 30th year-ends. Which of the following should be made to the opening non-controlling interest (NCI)balance to arrive at the April 30, 20X2, NCI balance on Fleming's statement of financial position?
A)Add in the NCI's share of Donner's fiscal 20X2 net income and subtract the NCI's share of Donner's dividends declared.
B)Subtract the NCI's share of Donner's fiscal 20X2 net income and add in the NCI's share of Donner's dividends declared.
C)Add in both the NCI's share of Donner's fiscal 20X2 net income and dividends declared.
D)Subtract both the NCI's share of Donner's fiscal 20X2 net income and dividends declared.

Question

Quizplus · Accepted Answer

To arrive at the NCI balance on Fleming's statement of financial position, we need to adjust the opening NCI balance to reflect the NCI's share of Donner's financial performance during the year. This involves adding in the NCI's share of Donner's net income and subtracting their share of Donner's dividends declared. Therefore, A is the correct choice. Option B is incorrect because we need to subtract the NCI's share of Donner's net income from the opening NCI balance, not add it in. Option C is incorrect because we do not need to add in both the NCI's share of Donner's net income and dividends declared since the dividends declared have already been included in the net income figure. Option D is incorrect because we need to adjust the NCI balance for both the net income and dividend figures, not just subtract them.