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Prepare table that shows the ownership interest percentages

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Reference no: EM132839106

Question - NCI ENTRIES - On 1 July 2018, Parent Ltd acquired 90% of the ordinary voting shares of Child Ltd which in turn acquired 60% of the ordinary voting shares of Grandchild Ltd.

The fair value of the net assets of Grandchild Ltd at the date of acquisition are represented by total shareholders' equity as follows:

$

Share capital 200,000

Retained profits 100,000

Total shareholders' equity 300,000

The net profits of and dividends paid by Grandchild Ltd for the two years ending 30 June 2019 and 30 June 2020 are as follows:

$

After tax Profit for 2019 140,000

Dividends paid for 2019 (40,000)

After tax Profit for 2020 200,000

There are no are other changes in the equity for Grandchild Ltd.

REQUIRED -

A) Prepare a table that shows the ownership interest percentages in the two subsidiaries distinguishing between direct and indirect interests.

B) Based on the information provided, prepare the consolidation journal entries necessary to allocate the non-controlling interest in Grandchild Ltd as at 30 June 2020.

Reference no: EM132839106

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