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?

Thanks

Comments

  • 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.

    So...

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