The pre-acquisition entry for the Riley group in order to consolidate a 75% interest in a subsidiary contained the following debits: Retained earnings $16 000, share capital $80 000, general reserve $30 000, BCVR $12 000. The direct non-controlling interest's share of the subsidiary's equity at the date of acquisition is:

Question

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The total equity of the subsidiary at the date of acquisition is calculated as follows:

Retained earnings + Share capital + General reserve + BCVR = Total equity
$16 000 + $80 000 + $30 000 + $12 000 = $138 000

As the acquiring company holds a 75% interest, the non-controlling interest's share of the subsidiary's equity is:

Non-controlling interest = Total equity x Non-controlling interest percentage
Non-controlling interest = $138 000 x 0.25 (25% non-controlling interest)
Non-controlling interest = $34 500

Therefore, the direct non-controlling interest's share of the subsidiary's equity at the date of acquisition is $34 500.

The Pre-Acquisition Entry for the Riley Group in Order to Consolidate