P Ltd acquired its 100% interest in E Ltd for cash consideration of $100,000 in January 20X1.

P Ltd acquired its 100% interest in F Ltd for cash consideration of $230,000 in February 20X2 when F Ltd's net assets at fair value were represented by share capital of $100,000 and retained profit of $130,000.

P Ltd acquired its 100% interest in G Ltd for cash consideration of $250,000 in March 20X5 when G Ltd's net assets at fair value were represented by share capital of $100,000 and retained profit of $100,000.

There has been no goodwill impairment.

On 1 January 20X8, P Ltd sold (i) all its shareholding in E Ltd for cash consideration of $450,000,

(ii) 90,000 of F Ltd's shares for cash consideration of $400,000, and

(iii) 40,000 of G Ltd' shares for cash consideration of $120,000.

The fair value of the remaining 10,000 shares in F Ltd (accounted as FVOCI investments is $35,000 and $38,000 on 1 January and 31 December 20x8 respectively).

(a) Statement of financial position as at 31 December 20X8

P Ltd E Ltd F Ltd G Ltd

$'000 $'000 $'000 $'000

Investment in AFS, at fair value 10,000 shares in F Ltd 38 - - -

Investment in subsidiary, at cost 60,000 shares in G Ltd 150 - - -

Other assets 1,010 800 700 600

1,198 800 700 600

Share capital 400 100 100 100

Fair value reserve 15 - - -

Retained profits 550 420 280 190

Liabilities 233 280 320 310

1,198 800 700 600

(b) Statement of profit or loss and other comprehensive incomes for the year ended 31 December 20X8

P Ltd E Ltd F Ltd G Ltd

$'000 $'000 $'000 $'000

Sales 400 500 300 200

Cost of sales 100 200 100 100

Gross profit 300 300 200 100

Profit on sale of shares of E 350

Profit on sale of shares of F 193 - - -

Profit on sale of shares of G 20 - - -

Operating expenses 363 120 80 40

Profit before tax 500 180 120 60

Taxation 50 60 40 20

Profit after tax 450 120 80 40

Other comprehensive income

Fair value gain 15 - - -

Total comprehensive income 465 120 80 40

(c) Statements of changes in equity (partial) for the year ended 31 December 20X8

P Ltd E Ltd F Ltd G Ltd

$'000 $'000 $'000 $'000

Beginning retained profits 100 300 200 150

Profit for the year 450 120 80 40

Ending retained profits 550 420 280 190

Beginning fair value (AFS) reserve - - - -

Gain for the year 15 - - -

Ending fair value (AFS) reserve 15 - - -

How to eliminate the beginning retained profits for 20x8 CJE?