Assume the same data as in Question 14.Any goodwill element in the cost of acquisition had not been impaired.The consolidated shareholders' equity of Arkle Ltd and its subsidiary at June 30 20X6 is:
A) $10,080,000
B) $10,100,000
C) $10,350,000
D) None of the above.

Question

Quizplus · Accepted Answer

The consolidated shareholders' equity can be calculated as follows:
Total equity of Arkle Ltd at June 30, 20X6 = $5,000,000
Add: Retained earnings of Arkle Ltd at June 30, 20X6 = $2,400,000
Add: Equity of the subsidiary at June 30, 20X6 = $4,000,000
Add: Non-controlling interests at June 30, 20X6 = $950,000
Total consolidated shareholders' equity = $11,350,000
Since the non-controlling interests represent 10% of the subsidiary, we need to deduct 10% of the goodwill of $1,000,000 = $100,000
Therefore, the consolidated shareholders' equity is $11,350,000 - $100,000 = $10,350,000. 
Hence, the correct choice is C.

Assume the Same Data as in Question 14