consolidated statement

chapter 23 example 2

P acquired 60% of the shares in S on 1 January 2007 when the retained earnings of S stood at
$6,000.The fair value of the non-controlling interest at the date of acquisition was $30,000.
On 31 December 2010, the Statements of Financial Position of each of the two companies were as
Follows:
P S
Non-current assets 50,000 30,000
Investment in S, at cost 40,000
Current assets 14,000 12,000
Total 104,000 42,000
Share capital – $1 shares 50,000 20,000
Retained earnings 44,000 16,000
Current liabilities 10,000 6,000
Total 104,000 42,000

sir I noticed share capital was not adjusted to find goodwill, but how come it was adjusted to find retained earnings?