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Chapter Example 6: I do not understand the question saying Lasma has not accounted for dividends receivable from Goda which were proposed before the year end.
can you please help me to calculate the W 3. Retained earning and how to deal with dividends in this question. Although question is not asking to calculate Retained Earning
its just for my understanding
many thanks sirIn Lasma’s records and therefore in working W3 we need to anticipate the receipt of the Goda dividend
Dr Receivables, Cr Retained Earnings
But that Receivable figure is intra-group and therefore needs to be cancelled against part of the dividend payable obligation shown in Goda’s current liabilities
That cancellation for consolidation purposes will leave as an obligation in Goda’s records just the dividend that is payable to the nci
But that cancellation does not affect the entry that we have made in Lasma’s retained earnings figure
Is that enough for you?
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