Question

Murray Plc owns​ 60% of the equity share capital of Federer Ltd. For the year ended 31 December 20X6 Federer reported profit after tax of pound​200,000. During the year Federer had sold goods to Murray Plc for pound​60,000 at cost plus​ 25%. At the​ year-end 70% of these goods were unsold. What is the profit attributable to the​ non-controlling interest in the consolidated statement of comprehensive income for the year ended 31 December​ 20X6?

Answer 1

Answer:

$76,640

Explanation:

The solution of profit attributable to the​ non-controlling interest is provided below:-

Percentage of equity share capital = 100% - Equity share capital percentage

= 100% - 60%

= 40%

As we know that if profit percentage is 25% on cost so sale percentage is equals to 20%

So,

Profit on sale value = Sale percentage × Sale value

= 20% × $60,000

= $8,400

now,

Total adjust profit = Profit after tax - Unrealized profit on unsold stock

= $200,000 - $8,400

= $191,600

and, after the total adjust profit finally

Profit attributable to the​ non-controlling interest = Total adjust profit × Percentage of equity share capital

= $191,600 × 40%

= $76,640