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John Moffat.
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Isabella1
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BPP kit MTQ 25.1
In this, we are given Retained Earning of Cat at Reporting Date as 200,000. Retained Earnings at Acquisition (which is start of year) as 50,000. Profit for year for Cat is 55,000. How is it possible to have 150,000 increase in Retained Earnings?
John Moffat
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The retained earning were $50,000 on 1 January 20X7.
By 31 December 20X8 they will have increased by the profits for 20X7 and 20X8 – not just by the profit in 20X8.
Isabella1
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