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      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?
      A Rs. 3,00,000 Correct Answer Incorrect Answer
      B Rs. 2,40,000 Correct Answer Incorrect Answer
      C Rs. 8,00,000 Correct Answer Incorrect Answer
      D Rs. 5,00,000 Correct Answer Incorrect Answer
      E Rs. 6,40,000 Correct Answer Incorrect Answer

      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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