Question 7 Not yet answered Marked out of 2 P Flag question Ross plc buys 60% of B

Accounting Nov 16, 2020

Question 7 Not yet answered Marked out of 2 P Flag question Ross plc buys 60% of B. Ross already owns 30% of Cand C owns 40% of D. Bowns 80% of E and 25% of D. Based on the group structure of Ross, the minority interest in E for the consolidated financial statements of Ross Group will be: Select one: a. 20% b. 40% c. 48% 0.52%

Expert Solution

R owns 60% of 80% = 48%

Non controlling Interest in B owns 40% of 80% = 32% of E

Non controlling Interest in E itself owns the remaining 20% of the E quity

Hence Minority or Noncontrolloing Interest = 52%

E is neverthless a sub subsidiary of Ross, because it is subsidiary of B which is in turn subsidiary of Ross. The chain control thus makes E sub subsidiary of Ross which owns only 48% of its equity

Option D

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