Specimen
1413 others answered this question

MC Question 15

On 1 October 20X4, Pyramid Co acquired 80% of Square Co’s nine million equity shares.

At the date of acquisition, Square Co had an item of plant which had a fair value of $3m in excess of its carrying amount.

At the date of acquisition it had a useful life of five years.

Pyramid Co’s policy is to value non-controlling interests at fair value at the date of acquisition.

For this purpose, Square Co’s shares had a value of $3·50 each at that date.

In the year ended 30 September 20X5, Square Co reported a profit of $8m.

At what amount should the non-controlling interests in Square Co be valued in the consolidated statement of financial position of the Pyramid group as at 30 September 20X5?

A     $26,680,000
B     $7,900,000
C     $7,780,000
D     $12,220,000