Home For AAT student members AQ 2016 Professional Diploma in Accounting Financial Statements for Limited Companies
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Paper 1 - Task 6

Hi, @dumutroba

Is anyone able to help with the workings for the retained earnings - Houston Ltd - Attributable to Texas PLC please? I can't seem to get the answer 32?



  • daniellaengland1107daniellaengland1107 Registered Posts: 2
    It took me ages to get my head wrapped around retained earnings for consolidated statements!

    Retained earnings comprises of 100% the parent's retained earnings, plus or minus the increase or decrease of the subsidiary's retained earnings since the date of acquisition.


    Retained earnings of Houston Ltd at time of acquisition: 20
    Retained earnings of Houston Ltd on the statements of financial position: 60

    60 - 20 = 40 (this is an increase in retained earnings since date of acquisition)

    % owned by Texas PLC = 80%

    40 x 80% = 32

    Hope that helps! :)
  • NataliedoryNataliedory AAT Student Posts: 26
    @daniellaengland1107 - Thank you, just after i posted this, I finally got my head around it.
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