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Please help, If A acquire 100% of share capital of B, this took place in Jan 2007 and during such time B retained earning is 15K. Financial statement position as at 31 Jan 2009, the Retained earning for A and B is 50K and 20K respectively.
Can kindly advise what the answer to this question.
Thank you.
Firstly, if you want me to help then you should ask in the Ask the Tutor Forum – this forum is for students to help each other.
However, you have not said what the question wants!!
Have you watch my free lectures on consolidations? The free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.
Hi John, sorry, still new to this. Will ask in the tutor forum going forward.
The question is asking for Group Retained Earning as at 31st Jan 2009.
Thank you for your prompt response.
The group retains earnings are all of the retained earnings of the parent company (50K) plus 100% of the earnings of the subsidiary since acquisition (20K – 15K).
Again, I do suggest that you watch my free lectures on consolidations.
Thank you John, I will definitely watch your lectures and has tried the CBE for F3.
But I still cannot understand why, as the acquisition happen in 2007, now we are look at 2009, why we need to minus of 15K. Am I right to think that, as Retained Earning is cumulative hence we need to minus the pre acquisition amount it does not matter what year it is?Hi John, Thank you so much, sorry keep responding here. I am enjoying your lecture for few of the topic that I am weak. Appreciate your time to response to my question.
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