Caloundra Limited has an ownership interest of 60% in a subsidiary Aroona Limited. Aroona owns 70% of Bribie Limited. Since acquisition date the retained earnings of Bribie Limited have increased from $100 000 to $150 000. The direct non-controlling interest in the retained earnings of Bribie is:

Question

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The direct non-controlling interest in Bribie Limited is 30% (100% - 70% ownership by Aroona). The increase in retained earnings is $50,000 ($150,000 - $100,000). The non-controlling interest's share of this increase is 30% of $50,000, which is $15,000. The original retained earnings were $100,000, of which the non-controlling interest would have a 30% share, equaling $30,000. Adding the increase ($15,000) to the original share ($30,000) gives a total of $45,000.

Caloundra Limited Has an Ownership Interest of 60% in a Subsidiary