Economics · Consolidated Financial Statements
Pratt Co acquired two subsidiaries in the year ended 31 December 20X5 and values non-controlling interests at fair value. On 1 January 20X5, Pratt Co acquired 80% of Sam Co. Goodwill was $20,000 (not impaired). A fair value adjustment at acquisition showed that Sam Co's plant (5 years remaining life) had a fair value of $5,000 in excess of carrying amount. Sam Co has not adjusted its individual books. On 1 April 20X5, Pratt Co acquired 75% of Tait Co; goodwill was $50,000, which was impaired by 40% at 31 December 20X5. What is the total charge to group retained earnings at 31 December 20X5 as a result of these consolidation adjustments?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$16,800
- 2$15,750
- 3$21,000
- 4$15,800✓
Correct answer
$15,800
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