Gerrard Ltd. acquired 75% of Sittler Ltd. at April 30, 2012. Both companies have April 30 year-ends. Which of the following adjustements should be made to the opening non-controlling interest (NCI)balance to arrive at the April 30, 2013 NCI balance on Gerrard's statement of financial position?

Question

Quizplus · Accepted Answer

To arrive at the April 30, 2013 NCI balance on Gerrard's statement of financial position, we need to adjust the opening NCI balance to account for the NCI's share of Sittler's fiscal 2013 net income and dividends declared.

Option A and D involve only subtracting or adding both net income and dividends which is incorrect as it doesn't distinguish between the NCI's share and Gerrard's share.

Option B involves adding both net income and dividends, which is incorrect because the NCI receives only a part of both net income and dividends.

Option C involves adding the NCI's share of Sittler's fiscal 2013 net income and subtracting the NCI's share of Sittler's dividends declared, which is the correct adjustment to arrive at the April 30, 2013 NCI balance.