Good Day,
I'm currently doing some section C exam kit questions. In these questions the retained earnings at acquisition is not given. How do you calculate it when it's not?
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Pre-Acquisition Retained Earnings
5y ago#1Hi,
If it is not given then you will be able to calculate it from the information given in the question. We tend to see this when there is a mid-year acquisition.
Usually you have to pro-rate the profits for the year and look to deduct the profit earned since acquisition from retained earnings at the reporting date.
Thanks
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