Accounting for subsidiary
Shares in CPE Ltd CR $6500
(ii) Acquirement of PDQ Ltd
Retained profits DR $1000
Share capital DR $3000
Reserves DR $1500
Dividend payable DR $500
Goodwill DR $500
Shares in PDQ Ltd CR $6500
(2) At 30 May 20X9
(i) CPE Ltd
Operating Profit Before Income Tax DR $2.09*
Retained profits DR $2000
Share capital DR $4000
Reserves DR $0
Goodwill DR $497.91
Dividend Paid CR $500
Shares in CPE Ltd CR $6000
(ii) PDQ Ltd
Operating Profit Before Income Tax DR $2.09*
Retained profits DR $2000
Share capital DR $3000