Question
Parent Ltd. acquired 80% of Subsidiary Ltd. on 1st April
2023. At the time of acquisition, the subsidiary’s retained earnings were Rs. 5,00,000. On 31st March 2024, the subsidiary reported total retained earnings of Rs. 8,00,000. What amount of post-acquisition retained earnings belongs to the parent?Solution
Post-acquisition increase = 8,00,000 – 5,00,000 = Rs. 3,00,000. Parent’s share = 80% = Rs. 2,40,000.
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