Question: Non-controlling Interest (11 marks) Band Ltd is the parent of a group of entities which includes Flute Ltd and Clarinet Ltd. The acquisition date for both subsidiaries was on 1 July 2020 and the total DNCI in the subsidiaries is 35%, and INCI is 15%. The following summarised financial information is provided: • Retained earnings at DOA $230,000 • Retained earnings at 1/7/2021 $580,000 • Current period profit for the year ended 30/6/2022 $220,000 • General reserves at DOA $80,000 • General reserves at 1/7/2021 $80,000 • General reserves at 30/6/2022 $90,000
REQUIRED:
a) Based on the financial information provided, prepare the calculations for the NCI allocation (using the NCI memorandum method) for the period ended 30 June 2022.
b) Based on your calculations, prepare the journal entry to record the allocation of the NCI share of the general reserve as at 30 June 2022, including narration.