Dfs

Gemma Culliss

Hi,

Please can some one tell me an easy way to work out Ret Earnings

Thanks

jilt

Gemma Culliss wrote: »

Hi,

Please can some one tell me an easy way to work out Ret Earnings

Thanks

Is this for consolidated statements of financial position, or just in general?

ckane4

DFS Retained Earnings

If just on normal Balance Sheet:

Retained Earnings (usually given in Trial Balance of question)
+ Profit from Current Year (that you will have just worked out)
- All Dividends paid out within the Year
= R.E. for bottom of Balance Sheet

Then you add the Share Capital amount to this to give the total equity (balancing figure)

I've just done this on Task 1.2 on June 09 exam and works out correct - that exam paper looks like lots of good practice so working through the rest now!! (

Gemma Culliss

Consolidated Balance Sheet

Hi,

Sorry didn;t explain properly. I am going through June 2009 too, and on the Consolidated Balance Sheet i cannot work out the retained earnings off the answers they have given.

Thanks

ema192

hi i have just done this paper myself,

retained earnings are calculated :

parent 22526

subsidiary (post - pre acquistion earnings) 11740-9640= 2100 x 60% = 1260

22526+ 1260 - 1004 (impairment of goodwill)
= 22782 retained earnings



hope this helps emma

DaveIOW

I may be wrong here but, if its the consolidated retained earnings is it not the total of the Parent companies retained earnings + the parents share of the retained earnings of the subsidiary for that year. The rest of the subsidiary's retained earnings ( the bit that was there when the parent company bought the shares ) is used up in the goodwill & non controlling interest calculation.

DaveIOW

DaveIOW wrote: »

I may be wrong here but, if its the consolidated retained earnings is it not the total of the Parent companies retained earnings + the parents share of the retained earnings of the subsidiary for that year. The rest of the subsidiary's retained earnings ( the bit that was there when the parent company bought the shares ) is used up in the goodwill & non controlling interest calculation.

oh yeah as the previous poster said, also less the goodwill impairment...must remember that on Wednesday!

jilt

If you're on when I get home and your still not sorted I'll check it, I did the paper yesterday, just difficult to do it here when not got figures

Ah see you're sorted, sorry started typing then got distracted

Steve Collings

I think the goodwill impairment is often thrown in because students forget the double entry concept. Remember we don't have "single entry" bookkeeping - if you reduce the goodwill (CR) you must do something with the debit. If you were drawing up the consolidated income statement you would send the debit to the income statement to reduce profits as impairments are a charge in much the same way as depreciation/amortisation. If you are just preparing the consolidated position statement you will reduce retained earnings because retained earnings are simply accumulated profits.

Kind regards
Steve