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Dear Mr. John,
Greetings!!!
FA revision kit 2019 ..question number 26.6 C, while calculation of NCI , they have taken =(100-60)*20% but pre-acq retain earning is not given in the question.
Please advice.
Regards,
VictorHilton bought the shares on 1 Jan 20X3, so the pre-acquisition retained earnings were the earnings as at 1 Jan 20X3 which are given in the SOFP.
Dear Mr. John
In the SOFP is given
Hilton Co Shrew CoRetained Earnings
As at Jan20X3 140,000 60000
How do i have to calculate 100/- out of it ?
Regards,
VictorThe retained earnings at the date of acquisition (1 Jan X3) were 60,000, and therefore all 60,000 was earned pre-acquisition.
Dear Mr. John,
The answer is given as per below:
(20%X(100-60))=
What is calculation of 100/- , though it is not mentioned in question ?
Need your help.
Regards,
VictorThe retained earnings at the start of the year were 60,000 and this is all pre-acquisition.
The total retained earnings at the end of the year are 100,000 (60,000 + 40,000), and since 60,000 was earning pre-acquisition, the other 40,000 was earned post-acquition.
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