FR (Page 339)

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the subsidiary company b/d amounted to £ 120,000 andthe c/d amounted to £150,000. REQ. Compute the retained profits on date of acquisition and the amount to be transferred to thecost of control if the financial year end is 31/12/03 Retained profits for the year ; Bal c/d – Bal b/d 150,000 – 120,000 =30,000 Pre-acquisition profits ; 1 st Jan 03 – 31 st March 03 = ¼ X30,000 = 7500 Retained profits on acquisition = bal b/d + pre-acquisition = 120,000 + 7500 = £127,000 iii) To cost of control = 80% x 127,000 = £102,000
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