Kerry Ltd Owns 70% of James Ltd

question 29

Multiple Choice

Kerry Ltd owns 70% of James Ltd.For the year ended 30 April 20X1, James Ltd reported a profit of $1 million.On 30 May 20X0, Kerry Ltd sold inventory to James Ltd for a $0.5 million profit.All of this inventory was sold by Kerry Ltd on 1 June 20X1.What is the NCI share of James Ltd's 20X1 profit?

• A)$120 000
• B)$150 000
• C)$300 000
• D)$450 000

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Definitions:

GAAP

Generally Accepted Accounting Principles, a set of rules and standards used for financial reporting and accounting in the U.S.

Net Realizable Value

The estimated selling price in the ordinary course of business minus the estimated costs of completion and the necessary costs to make the sale.

Replacement Cost

The current cost of replacing an asset with a similar new asset.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the company.