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?
Q11
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 |
|
|
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
|
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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