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Hi Mike
For the example 2 (Chapter 4) W3 Retained Earnings you provided the the profit figure which was then used to calculate the as per q value for I55% and pre acq for I80%
This all fine, however, in many of the exam kits the profit figure is not provided so my question is how would I derive the above figure?
Thanks.
If the exam question doesn’t actually spell out the levels of retained earnings, then there will be enough for you to derive the relevant figure.
The complication in this type of question is where there is a change in percentages part way through the year. In that situation, the examiner HAS to give you the year’s results. You couldn’t attempt the question otherwise!
Many thanks for your reply.
With your response in mind, I am currently at a loss attempting Dec 11 Traveller
https://www.accaglobal.com/content/dam/acca/global/PDF-students/2012/p2int_2011_dec_q.pdfI have got to W3 RE and am stuck at the following:
S D80% D60%
Per q 1066 442 ??
pre acq ?? 299Can you please be kind enough to take a look and help me fill in the blanks?
Without looking at the question itself, what you are trying to find is the retained earnings as at the date of the further acquisition somewhere between 299 and 442. When you have found that, the amount will slot into your working for both the places where you have indicated “??”
Now, I’ve looked at the question and I see that the second acquisition taking the investment from 60% to 80% was on the last day of the financial year
So both places where you have indicated “??” can now be completed with the figure 442.
Ok?
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