The following is an extract from the non-controlling interest memorandum,used to calculate non-controlling interests.Both subsidiaries became members of the economic entity at the same time at the start of this current period. $$\begin{array} { | l | r | r | r | }
\hline & \text { Barbie Ltd } & \text { Ken Ltd } & \text { Total NCl } \
\hline \text { Non-controlling interest in profit after tax } & & & \
\text { Profit as shown in respective entity's reports } & 12000 & 16000 & \
\text { less: Dividend received from entity within group } & ( 2500 ) & & \
\text { Profit contributed to the economic entity } & 9500 & 16000 & \
\hline \text { Non-controlling interest } & 3800 & 9920 & 13720 \
\hline \begin{array} { l }
\text { Non-controlling interest in opening retained earings } \
\text { Opening retained earnings }
\end{array} & 15000 & 24000 & \
\hline \text { Non-controlling interest } & 6000 & 9600 & 15600 \
\hline
\end{array}$$ What is the parent's direct equity (percentage)interest in Barbie Limited?

Question

The following is an extract from the non-controlling interest memorandum,used to calculate non-controlling interests.Both subsidiaries became members of the economic entity at the same time at the start of this current period. $$\begin{array} { | l | r | r | r | } 
\hline & \text { Barbie Ltd } & \text { Ken Ltd } & \text { Total NCl } \
\hline \text { Non-controlling interest in profit after tax } & & & \
\text { Profit as shown in respective entity's reports } & 12000 & 16000 & \
\text { less: Dividend received from entity within group } & ( 2500 ) & & \
 \text { Profit contributed to the economic entity } & 9500 & 16000 & \
\hline \text { Non-controlling interest } & 3800 & 9920 & 13720 \
\hline \begin{array} { l } 
\text { Non-controlling interest in opening retained earings } \
\text { Opening retained earnings }
\end{array} & 15000 & 24000 & \
\hline \text { Non-controlling interest } & 6000 & 9600 & 15600 \
\hline
\end{array}$$ What is the parent's direct equity (percentage)interest in Barbie Limited?

Quizplus · Accepted Answer

As both subsidiaries became members of the economic entity at the same time, the parent's direct equity interest in both subsidiaries would be the same. From the given information, we know that the parent has a direct equity interest of 40% in Ken Limited. Therefore, the parent's direct equity interest in Barbie Limited would also be 40%. Hence, the correct choice is D - 40%.

The Following Is an Extract from the Non-Controlling Interest Memorandum,used