What amount should be recorded as non-controlling interest in the net assets of Mahlangu Limited in the consolidated statement of financial position of Mashego Limited at 30 April 2016?
What amount should be recorded as non-controlling interest in the net assets of Mahlangu Limited in the consolidated statement of financial position of Mashego Limited at 30 April 2016?
What amount should be recorded as non-controlling interest in the net assets of Mahlangu Limited in the consolidated statement of financial position of Mashego Limited at 30 April 2016?
On 3 May 2016, Mashego Limited acquired 75% (and control) of Mahlangu Limited’s outstanding ordinary shares for R112 000. The fair value of the non-controlling interest was equal to a proportionate share of the book value of Mahlangu Limited’s net assets at the date of acquisition. The selected balance sheet data for the two companies as at 30 April 2016 are as follows:
Mashego
Mahlangu
Limited
Limited
R
R
Total assets
504 000
216 000
Liabilities
144 000
72 000
Ordinary shares
120 000
60 000
Retained earnings
240 000
84 000
Equity & liabilities
504 000
216 000
What amount should be recorded as non-controlling interest in the net assets of Mahlangu Limited in the consolidated statement of financial position of Mashego Limited at 30 April 2016?
Select one:
a. R90 000
b. R54 000
c. R36 000
d. R108 000
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
Expert Solution
Step 1
Given in the question:
Mashego Limited
Mahlangu Limited
Total Assets
504000
216000
Liabilities
144000
72000
Ordinary Shares
120000
60000
Retained Earnings
240000
84000
Equity & Liabilities
504000
216000
It has been mentioned that the fair value of the non-controlling interest was equal to the proportionate share of the book value of Mahlangu Limited’s net assets.
The 75% interest was purchased for R112,000 of Mahlangu by Mashego Limited
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