Petros Limited is a subsidiary of Butros Limited. When Butros acquired its 60% interest in Petros, the retained earnings of Petros were $20 000. At the beginning of the current period Petros Limited's retained earnings were $50 000. Petros earned profit after tax of $10 000 during the current period. The share of the non-controlling interest in the equity of Petros Limited at the end of the current period is:
A) $8 000.
B) $16 000.
C) $24 000.
D) $32 000.

Question

Quizplus · Accepted Answer

The share of the non-controlling interest in the equity of Petros Limited at the end of the current period is $24 000. This is calculated as follows:Beginning retained earnings of Petros Limited: $50,000Add: Profit after tax for the current period: $10,000Less: Dividends paid during the current period: $0Ending retained earnings of Petros Limited: $60,000Multiply by the non-controlling interest percentage: 40%Share of the non-controlling interest in the equity of Petros Limited: $24,000

Petros Limited Is a Subsidiary of Butros Limited