On 1 January 20X4 P plc acquired 80% of S plcs equity share capital of 120,000. At
Question:
On 1 January 20X4 P plc acquired 80% of S plc’s equity share capital of £120,000. At the date of acquisition the total of S plc’s net assets in its statement of financial position was £689,200. The fair values of S plc’s net assets were found to be equivalent to their carrying amounts with the exception of a building which had a fair value £250,000 greater than its carrying amount. The building had a remaining useful life of 20 years.
On 31 December 20X7 the retained earnings of P plc and S plc were £887,100 and £804,700 respectively. The companies’ only reserves were retained earnings.
What is consolidated retained earnings at 31 December 20X7?
A £939,500
B £1,035,500
C £1,045,500
D £1,235,000
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield