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

Question

Quizplus · Accepted Answer

Since Butros has a 60% ownership in Petros, the non-controlling interest holds the remaining 40%. Therefore, the non-controlling interest's share of the closing retained earnings would be 40% of $60,000 ($50,000 beginning retained earnings + $10,000 current period profit), which is $24,000.

Petros Limited Is a Subsidiary of Butros Limited