Beach Limited is a subsidiary of Golden Limited. When Golden acquired its 70% interest in Beach, the retained earnings of Beach Limited were $40 000. At the beginning of the current period, Beach Limited's retained earnings had increased to $100 000. Beach also earned profit of $20 000 during the current period. The NCI's share of the equity of Beach Limited at reporting date is:
A) $36 000.
B) $30 000.
C) $6000.
D) $84 000.

Question

Quizplus · Accepted Answer

The NCI's share of the equity is calculated based on their percentage of ownership (30%) and includes their share of retained earnings at the beginning of the period, plus their share of the profit earned during the period. The retained earnings at the beginning of the period were $100,000, and the profit for the current period was $20,000, making a total of $120,000. The NCI's share is 30% of $120,000, which is $36,000.

Beach Limited Is a Subsidiary of Golden Limited