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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?
Hi,
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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