how to calculate subsi retained earning?
june 2013 question 1
i know pre + post acqusition profit is 10000 but in subsi retained earning why it dint minus the pre acqusition loss of 20000?
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FRF7 revision kit mock exam 1 question number 3 , paradigm
Per the question the retained earnings are 4,000 profit (loss of 4,000 + profit of 8,000).
Pre-acquisition there was a loss of 4,000 to April X2 and then a further loss of 2,000 to October (acquisition date).
Therefore post-acquisition profits are 4,000 - (-4000) - (-2000). Double negative makes a positive so post acquisition profits are 10,000.
The 2,000 pre acq loss is accounted for.
Hope this helps.
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