Page 429 - F3 -FA Integrated Workbook STUDENT 2018-19
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Answers
Example 2d cont.
(W5) Group retained earnings at reporting date
$
Parent retained earnings (1) 405,000
Subsidiary (Group % × post-acquisition reserves) (W2) (2)
80% × ($251,000 – $211,000) 32,000
Less: PURP adj (if P sells to S) (3) (2,500)
––––––
434,500 (To SOFP)
––––––
Key issues
(1)
Ref = information identified in parent SOFP. Look to see if a PURP
adjustment is required if sales were made by the parent to the subsidiary.
(2)
Ref = identified from the movement in the subsidiary’s net assets between the
date of acquisition and the reporting date.
(3)
Ref = information included in notes to the question and will usually require
calculation – see more detail in this chapter.
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