X Ltd purchased 70% of the shares of Y Ltd at a price of Rs. 1,00,000. The share capital of Y Ltd was 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?

[amp_mcq option1=”Rs. 25,000″ option2=”Rs. 70,000″ option3=”Rs. 1,00,000″ option4=”Rs. 40,000″ correct=”option1″]

The correct answer is A. Rs. 25,000.

Minority interest is the portion of the equity of a subsidiary that is not owned by the parent company. In this case, X Ltd owns 70% of Y Ltd, so the minority interest is 30%. The minority interest is calculated as follows:

Minority interest = Share capital of subsidiary * (1 – Ownership percentage)

= Rs. 70,000 * (1 – 0.7)

= Rs. 25,000

Option B is incorrect because it is the share capital of Y Ltd. Option C is incorrect because it is the purchase price of Y Ltd. Option D is incorrect because it is the total equity of Y Ltd.