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Hi mike,
From bpp work book
P acquired s on 1 jan when R.E was 190. The re on 31 dec as per question was 240.
However in the p&l in the question the after tax profit was 55.
Can this be right, or should the difference between the two R.E figures equal the profit after tax?
There were no unrecorded transactions as it was a very basic question
Thank you
Surely it means that the subsidiary has paid a dividend of 5
Does that fit?
No mention of dividends in the question…very strange indeed
Thanks for your response
By how much has retained earnings moved since last year? If that amount is not the same as the figure at the end of the statement of profit or loss, then a dividend has been paid!
You need to watch out for that when preparing an answer to a cash flow question!
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