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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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