On 1 January 2019, Happy Bhd acquired 75% of the ordinary shares and 30% of the preference shares of Lucky Bhd. The preference shares are classified as equity and they carry a cumulative preference dividend of 10% per year. The payment of dividend is discretionary and conditional on the company achieving sufficient profits in each year. Dividends on ordinary shares can only be paid after all arrears of preference dividends have been paid. For the year ended 31 December 2021, Lucky Bhd reported a profit after tax of RM70 million. Its equity consists of the following components: Cumulative preference shares of 100 million units 100,000 Ordinary shares of 200,000 units 200,000 Retained profits brought forward 80,000 Profit after tax for year ended 2021 70,000 Total 450,000 Required: (a) Compute the amount of profit for the year 2021 that shall be allocated to noncontrolling interests. (b) Determine the amount of non-controlling interest that shall be shown in the financial position.
On 1 January 2019, Happy Bhd acquired 75% of the ordinary shares and 30% of the
they carry a cumulative preference dividend of 10% per year. The payment of
dividend is discretionary and conditional on the company achieving sufficient profits
in each year. Dividends on ordinary shares can only be paid after all arrears of
preference dividends have been paid. For the year ended 31 December 2021, Lucky
Bhd reported a profit after tax of RM70 million. Its equity consists of the following
components:
Cumulative preference shares of 100 million units 100,000
Ordinary shares of 200,000 units 200,000
Retained profits brought forward 80,000
Profit after tax for year ended 2021 70,000
Total 450,000
Required:
(a) Compute the amount of profit for the year 2021 that shall be allocated to noncontrolling interests.
(b) Determine the amount of non-controlling interest that shall be shown in the
financial position.
Step by step
Solved in 3 steps
