Consol account

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August 20, 2020 at 5:42 pm #581320
carmenl26
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PRT acquired 80% of SUB’s ordinary shares on 1 January 2011 for $1,500,000 when SUB’s retained earnings were $254,000. At 1 January 2011 the carrying value of the net assets of SUB exceeded their fair value by $110,000 and the fair value of the Non- Controlling Interest was $300,000. The remaining useful life of the assets was 11 years from acquisition.

SUB has not issued any new shares since acquisition by PRT. SUB is PRT’s only subsidiary.
$000
Ordinary share capital 400 , Share premium 26 , Retained earnings 424

The retained earnings of PRT were $2,100,000 at 31 December 2013.
What is the amount that PRT should include in its consolidated statement of financial position as at 31 December 2013 for Retained Earnings?
A. $2,260,000 B. $2,212,000 C. $2,236,000 D. $2,620,000

Correct answer given $2260,000

Dear tutor, may I know why the answer is not B?
August 22, 2020 at 2:50 pm #581504
P2-D2
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Hi,

If you show me how you’ve calculated the answer for B then I can explain where you’ve gone wrong.

Thanks
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