X Ltd. purchased 70% of the shares of Y Ltd. at a price on 1,00,000. Share capital of Y Ltd. was of Rs. 70,000 and its accumulated profits amounted to Rs. 90,000. What would be the amount of Minority Interest in the consolidated balance sheet?

Minority interest is the portion of the equity of a subsidiary that is not owned by the parent company. It is calculated as the difference between the subsidiary’s net assets and the parent company’s share of the subsidiary’s equity.

In this case, X Ltd. purchased 70% of the shares of Y Ltd. at a price of Rs. 1,00,000. This means that X Ltd. now owns 70% of Y Ltd.’s net assets. Y Ltd.’s net assets are equal to its share capital plus its accumulated profits, which is Rs. 70,000 + Rs. 90,000 = Rs. 160,000. Therefore, X Ltd.’s share of Y Ltd.’s net assets is 70% x Rs. 160,000 = Rs. 112,000.

The minority interest is the remaining 30% of Y Ltd.’s net assets, which is Rs. 160,000 – Rs. 112,000 = Rs. 48,000. Since X Ltd. owns 70% of Y Ltd., the minority interest is equal to 30% x Rs. 48,000 = Rs. 25,000.

Option B is incorrect because it is the total value of Y Ltd.’s net assets. Option C is incorrect because it is the price that X Ltd. paid for Y Ltd.’s shares. Option D is incorrect because it is the share capital of Y Ltd.

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