Mammoth Ltd acquired 80 percent share capital of Tinny Ltd. On 1 July 2021, for...
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Accounting
Mammoth Ltd acquired 80 percent share capital of Tinny Ltd. On 1 July 2021, for a cost of $1600000. As at the date of acquisition, all assets and liabilities of Tinny Ltd were fairly valued except land that has a carrying value of $150000 less than the fair value. The recorded balance of equity of Tinny Ltd as of 1 July 2021 was as:
Share capital $800000
Retained earnings $200000
Revaluation surplus $400000
..
Total $1400000
Additional information:
The management of Mammoth Ltd values non-controlling interest following the net method.
Tinny Ltd has a profit after tax of $200000 for the year ended 30 June 2022.
During the financial year to 30 June 2022, Tinny Ltd sold inventory to Mammoth Ltd for $120000. The inventory costs Tinny Ltd $60000 to produce. 25 percent of the inventory is still in Mammoth Ltd's hand as of 30 June 2022.
During the year, Tinny Ltd paid Mammoth Ltd $60000 in management fees.
The tax rate is 30 percent.
Required:
Based on the above information, calculate the non-controlling interest as at 30 June 2022.
Pass necessary journal entries to recognise the non-controlling interest as of 30 June 2022.
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