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Hi Sir,
Hope you are well.
My question is on the consolidated statements on the mock exam.
According to my calculations retained earnings should be 243000.
RE of Alice: 189
Post acquisition retained earnings of Bertha 72
Pre acquisition retained earnings of Bertha (12)Alice’s share (0.90*60) 54
Therefore, 189+54 = 243000. However, the answer shows 233,000.
Also, just to confirm to calculate the receivable it is: 264+60-53=271000 where 53000 is the balance on the current account.
Appreciate your help.
Regards,
Munir
In future you must ask in the Ask the Tutor Forum if you want me to answer – this forum is for students to help each other.
The retained earnings figure is 233,000 because there is unrealised profit in inventory of 10,000 – this needs subtracting from Alice’s retained earnings.
Your figure for receivables is correct.
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