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Hi, would you please explain to me why the retained earnings of sub is 8000+2000 in consolidated reserves? I mean if the retained earnings as at 1st April 2012 is (4,000) and the pre- acq’n loss (1 April-Oct’12) is (2,000), then the retained earning as at acq’n date is (6,000). Then post acq’n retained earnings excluded any adjustment would be: 8,000 at consol date – (6,000)=2,000 but the Q says it is 8,000+2,000. Thanks!
For the year to 31 March, 2013 the subsidiary made a profit of $8,000 In the first 3 months of that year, the subsidiary made a loss of $2,000
What was the subsidiary results for the 9 months to 31 March?
OK?
Now it’s OK. I assumed that $8,000 includes the previous year’s profits/losses as well. But actually it’s not, I’ve just realized it from your answer.
Thanks for the quick reply.
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