[knowledge4life]

Dear Tutor,

Your explanation was marvellous. It is me, the student, who is lacking. Thank you so much! May you have a great day ahead! 🙂

[knowledge4life]

Hi tutor,

Thank you for the patient response. I have one last question – when you wrote Cr retained earning by 360. Am I suppose to add 360 to our retained account, since we Cr RE?

[knowledge4life]

Hi tutor,

I am sorry! I still does not get this part.

As for the consolidated statement of profit or loss, the 360 receivable from the subsidiary is excluded / ignored and instead the statement of profit or loss includes the subsidiary figures from Revenue down to Profit after tax, so the figure out of which the subsidiary is paying its dividend (profit after tax) IS included within the consolidation

[knowledge4life]

Hi MikeLitte,

Firstly, thank you so much for the quick response.

I have a few questions:
Is the credited retained earnings of 360 equivalent to investment income to the Parent?
And why should we add the 360(investment income=dividends) into our retained earning, instead do we need to eliminate investment income when producing consolidated statements?

There is no additional information on the 15,000 dividend payable in the subsidiary’s current liability. So sorry! ;( It is given as 15,000 dividend payable as at 31 Dec 20X1.

Once again, thank you so much for the help.

[Author]

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