Calculate the amount that prt should include

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Reference no: EM132468462

Problem - PRT acquired 100% of SUB's ordinary shares on 1 January 2011 for R1,136,000 when SUB's retained earnings were R260,000. At 1 January 2011 the fair value of the net assets of SUB exceeded their carrying value by R110,000. The remaining useful life of these assets was 11 years from acquisition.

SUB has not issued any new shares since acquisition by PRT. SUB is PRT's only subsidiary. PRT calculated that goodwill in its subsidiary was impaired by 20% at 31 December 2013. The equity of SUB as at 31 December 2013:

R000

Ordinary share capital 430

Share premium 86

Retained earnings 324

840

The retained earnings of PRT were R2,100,000 at 31 December 2013.

Required - Calculate the amount that PRT should include in its consolidated statement of financial position as at 31 December 2013 for:

(i) Goodwill

(ii) Group retained earnings.

Reference no: EM132468462

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