a) Based on the above information, calculate the non-controlling interest as at 30 June 2019. b) Prepare the necessary journal entries to recognise the non-controlling interest as at 30 June 2019.

Q) Giant ltd acquired 80 percent share capital of Expert ltd. On 1 July 2018 for a cost of $1,600,000. As at the date of acquistion, all assets and liabilities of Expert ltd were fairly valued except a land that has a carrying value $150,000 less than the fair value. The recorded balance of equity of Expert ltd as at 1 July 2018 were as:

Share capital               $800,000

Retained earnings     $200,000

General reserve         $400,000

Total                            $1,400,000

Additional information:

(i) The management of Giant ltd values non-controlling interest at the proportionate share of Expert ltd identifiable assets.

(ii) Expert ltd has a profit after tax of $200,000 for the year ended 30 June 2019.

(iii) During the financial year to 30 June 2019, Expert ltd sold inventory to Giant ltd for a price of $120,000. The inventory costs Expert ltd $60,000 to produce. 25 percent of the inventory are still on the hand of Giant ltd as at 30 June 2019.

(iv) During the year Expert ltd paid $60,000 in consultancy fees to Giant ltd.

(v) On 1 July 2018, Expert ltd sold an item of plant to Giant ltd $80,000. The equipment had a carrying value of $60,000(Cost $100,000, accumulated depreciation $40,000). At the date of sale, it was expected that the equipment had a remaining life of 4 years and no residual value.

(vi) The tax rate is 30 percent.

Required:

a) Based on the above information, calculate the non-controlling interest as at 30 June 2019.

b) Prepare the necessary journal entries to recognise the non-controlling interest as at 30 June 2019.