02-10-2010, 12:49 AM
You have not given any retained earning of the companies
There will be NO investment in subsidiary in the Statement of Financial Position. Instead Goodwill will be calculated
Total profit is 20,000, out of which 25% is unrealised, i.e 5000
Dr CD's Retained Earnings 3750
Dr Non-controlling interest 1250
Cr consolidated Inventory 5000
Therefore Decrease Retained Earnings by 3750, decrease NCI by 1250 and decrease inventory by 5000
There will be NO investment in subsidiary in the Statement of Financial Position. Instead Goodwill will be calculated
Total profit is 20,000, out of which 25% is unrealised, i.e 5000
Dr CD's Retained Earnings 3750
Dr Non-controlling interest 1250
Cr consolidated Inventory 5000
Therefore Decrease Retained Earnings by 3750, decrease NCI by 1250 and decrease inventory by 5000
