On November 1 20X6,a Parent Entity Midstream Ltd Acquired 25

Multiple Choice

On November 1 20X6,a parent entity Midstream Ltd acquired 25% of the share capital of Delta Ltd and the power to significantly influence the operating and financial policies of that company for $5,000,000 cash.In the period from the date of acquisition to June 30 20X7,Delta Ltd earned a profit for the period of $400,000 (after tax of $200,000) and declared a dividend of $200,000.At June 30 20X7,Midstream Ltd recognised its equity in the dividend.For the year ended June 30 20X7,in the separate income statement of Midstream Ltd and in the consolidated income statement of the group controlled by Midstream Ltd,the equity in the profit before tax of Delta Ltd would be reported as:

A) $200,000 and $100,000 respectively
B) $50,000 and $150,000 respectively
C) $50,000 and $120,000 respectively
D) None of the above.