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Hey Mr Mike
I pick up this in the flash card revision section.
The parent has a 75% holding in a subsidiary. Before the year end, the subsidiary directors declared a dividend of $6,000. How much dividend should be deducted from the subsidiary’s retained earnings in the calculation of consolidated retained earnings ( Working 3 )?
The answer is that all of it should be deducted. Please kindly clarify me on the reasoning of this deduction.How much dividend is the subsidiary going to pay, in total?
So how much needs to be taken out of the subsidiary’s retained earnings?
Does that answer it for you?
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