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- October 30, 2020 at 9:42 am #593510
Pike acquired 75%of the issued share capital of salmon on 1 Jan 20X6 for $8,720,000. In addition, Pike also invested in $1million of Salmon’s 5%loan notes at par value. An extract of financial statement of pike and salmon AS AT 31 march 20X6 is presented below:
Pike Salmon
$000 $000
Equity and liabilities
share capital
retained earnings 1,290
total equity 21,680 6,090
Non-current liabilities
5%loan notes20X9 16,440 11,180
Current liabilities 2,640 1,41040,760 18,680
the following information is relevant to the preparation of the consolidated financial statements:
(i) at acquisition,the fair value of land owned by salmon exceeded its cost by $1,000,000. This land was still owned at 31Mar20x6.(ii) During the post-acquisition period, salmon sold goods to pike for $500,000, on which it earned a margin of 10%.80%of the goods remained in pike’sinventory at the year end. at 31mar20x6 slamon was still owned half of the total amont invoiced to pike for these goods.
(iii) the fair value of the non-controlling interest in salmon at the date of acquisition was $2,400,000.
(iv) for the year ended 31mar20x6, salmon made a profitafter tax of 240,000.
Q: what amount should be inclued in the consolidated statement of financial position for retained earnings at 31 mar20x6?
how we find the retained earning from the parent company in this case.
Thank you.
October 30, 2020 at 9:55 am #593515If the 1,290 is the retained earnings of Salmon, then there is not enough information in what you have typed to be able to calculate the retained earnings of Pike.
If it is a question from the BPP Revision Kit then tell me which question and I can check for myself.
October 30, 2020 at 3:10 pm #593551It is a question from Kaplan exam kit, would you be able to help? The question doesnt provide retained earnings of Pike. These are all the question has provided.
From the answer it showed the figure of $12,480 + (75%*$60)-(75%*$40)PURP.
I cannot not understand how to find $12,480. Would appreciate if you could help. Thank you.October 31, 2020 at 10:44 am #593624I am sorry but I have no idea where the $12,480 has come from, and I do not have the Kaplan Exam Kit.
It seems as though it might be a typing error in the kit.March 11, 2022 at 11:13 am #651006Hi I know it is a year late but I am having the exact same problem. It seems like there is a mistake here. I have no idea where the 12480 came from.
March 11, 2022 at 5:01 pm #651043As I wrote in my previous post, I am unable to help for the reasons that I explained.
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