Associated companies

mursel

Limited Company Accounts (IAS) Unit 11 - Osborne Books
Pages 268-270. The example shown here I think must have a misprint here. Does anyone else agree with me ? On page 268 at the bottom, where it says "profits for 2006" just under retained earnings, it is mentioned as £20,000. However, at the top of page 269, profit for the year for 2006 is shown as £50,000. This just can't be. So the statement of financial position on page 270 does not make sense at all.
If there are questions on Associated Companies requiring detailed calculations, people studying this section will fail to get the marks for sure. If there are any tutors out there who can give an explanation, your answer will be much appreciated.

Rinske

Actually I'm not a tutor, but my guess is that the explanation can be found in the dividends paid.

In the income statement the profit after tax is 50,000. During the year 30,000 is paid on dividends. So that leaves 20,000 profits to be retained on the SoFP.