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I have no idea how they came up with the opening retained earnings of [230 + (185×80%)] Can anyone help please?
Thanks.
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Hi! The 230 comes from (Boo Retained Earnings) 500 less (Boo Profit for Year) 270. They have a 80% stake in Goose so 80% is taken of Goose’s Retained Earnings less Profit for the Year which is ((240 – 55) * 80%) = 148
Then the 230 is added to the 148 to get the opening retained earnings of 378.
Hope this helps! I’m not great at explaining things! Good luck tomorrow!
@nibhiadha said:
Hi! The 230 comes from (Boo Retained Earnings) 500 less (Boo Profit for Year) 270. They have a 80% stake in Goose so 80% is taken of Goose’s Retained Earnings less Profit for the Year which is ((240 – 55) * 80%) = 148Then the 230 is added to the 148 to get the opening retained earnings of 378.
Hope this helps! I’m not great at explaining things! Good luck tomorrow!
Thanks this realllllly helps alot! Am I to gather that in any given scenario, where the question gives no additional information, I calculate opening retained earnings in this way?
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