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Please can you explain how the retained earnings figure for 2008 (£1500) and 2009 (£2700) are derived?
Thanks
Is the printed solution on page 161 not sufficient?
Acording to the statement of changes in equity we had a brought forward figure for retained earnings as at 31 December 2008 of $2,000 per the question
Then we had a material error of $500 discovered in 2009 that required a prior year adjustment and that reduced the $2,000 brought forward figure down to $1,500
Then there was this year’s retained earnings of $1,200 to add on and that gives us the figure of $2,700 to carry forward as at 31 December 2009
OK?
Retained earnings
$’000
2,000
(500)
1,500
1,200
2,700
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