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i have a question about question 93 from Study Book of BPP.
Vayner Co acquired 100% of the ordinary shares in Weeton Co and Varlet Co some years ago.
Extracts from the statements of financial position of the 3 companies as on 30 September 20X7 were as follows.
Retained earnings:
Vaynor Co
$90’000
Weeton Co
$40’000
At acquisition Weeton Co had retained losses of $10,000 and Varlet Co had retained earnings of $30,000.
What are the consolidated retained earnings of Vaynor Co on 30 September 20X7?it says that retained losses of 10K, so i automatically less (40k-10k)
and it says retained earnings so i add the 30K to the 70K.but in the book its all vice versa, can you please explain? maybe i misunderstood something?
In future you must ask in the Ask the Tutor Forum if you are wanting me to answer.
If there was a retained loss of $10,000 at the date of acquisition then to get to positive retained earnings of $40,000 must been that they have made earnings of $50,000 since acquisition. (A retained loss is like negative retained earnings.)
I have no idea where you are getting 70,000 from in your second sentence.
Have you watched our free lectures on this? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well. If you are watching the lectures then you do not really need the Study Text. The essential book (however you choose to study) is the Revision Kit, because it is full of exam standard questions for practice, and practice is vital for passing the exam.
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