The Josh Company acquired an 80% interest in The Earl Company when Earl’s equity comprised share capital of P100,000 and retained earnings of P500,000. Earl’s current statement of financial position shows share capital of P100,000, a revaluation reserve of P400,000 and retained earnings of P1,400,000. Under PAS 27 Consolidated and separate financial statements, what figure in respect of Earl’s retained earnings should be included in the consolidated statement of financial position?
The Josh Company acquired an 80% interest in The Earl Company when Earl’s equity comprised share capital of P100,000 and retained earnings of P500,000. Earl’s current statement of financial position shows share capital of P100,000, a revaluation reserve of P400,000 and retained earnings of P1,400,000. Under PAS 27 Consolidated and separate financial statements, what figure in respect of Earl’s retained earnings should be included in the consolidated statement of financial position?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The Josh Company acquired an 80% interest in The Earl Company when Earl’s equity
comprised share capital of P100,000 and
P400,000 and retained earnings of P1,400,000. Under PAS 27 Consolidated and separate
financial statements, what figure in respect of Earl’s retained earnings should be included
in the consolidated statement of financial position?
a. 720,000
b. 1,520,000
c. 1,040,000
d. 1,440,000
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