On 1 April 2000, X, a limited liability company, paid $120,000 for 48,000 $1 shares in Y, another limited liability company, representing 80% of Y’s $60,000 share capital. The retained earnings of Y at that date were $70,000. At 31 March 2005 the retained earnings of the companies were:
$ X 180,000 Y 100,000 All goodwill arising has been written off because of impairment.
What figure should appear in the consolidated balance sheet of the X group at 31 March 2005 for retained earnings? A $208,000 B $8,000 C $204,000 D $188,000
D 180,000 + 100,000 – 56,000 – 20,000 – 16,000 = 188,000 |