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Literature & Language
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Topic:
The Non- controlling Interest Calculations
Essay Instructions:
Required: Calculate the following figures relating to the acquisition of Cameroon Ltd that will appear in the consolidated statement of financial position of Klarke plc at 30 September 2020: (a) the non-controlling interest (b) the goodwill arising on acquisition (c) the consolidated retained earnings of the group.
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Exercise 18.5
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Exercise 18.5
* The non-controlling interest
Non- controlling interest calculations involve the summation of the subsidiary’s ordinary shares on 30 September 2020, the retained earnings, andKlerke’sstake on the share premium account (100%) as follows. Besides, this balance sheet component does not include goodwill (Melville, 2019, p. 302)since it is not an identifiable asset.
£ (000)
Cameroon’s Ordinary Shares at 30 September 2020 5,000
Cameroon’s Retained Earnings 1 October 202028,370
100% Share Premium Account2,000
NCI at 30 September 202035,370
* The goodwill arising fromthe acquisition
Goodwill arises from a company’s good reputation of the acquired company(Melville, 2019, p. 102). Upon the merger between Klarke and Cameroon, the resulting goodwill is calculated bysummation of Cameroon’s ordinary shares,reserves, and the share premium account at the d...
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