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Hi mike
If we are debiting retained earnings for dividends in subsiduary shouldn’t the amount increase rather than decrease, ie in example 8 chapter 4 of your lecture it is 50 -10, surely this is crediting ret earn not debiting.
thanks
In the subsid, we need to decrease ret ears and increase payables with the full dividend.
In the parent, we need to increase ret ears and receivables with the parent’s share of the dividend to be received from the subsid.
Finally, we need to cancel the receivable in the parent’s SoFP against the same amount in the subsid’s payables in the subsid’s SoFP
Is that any clearer?
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