Hercules acquired 80% of the share capital of Samson a tew years ago. At the date of the acquisition the
retained earnings of Hercules was $200 million. The following data is available for the year end:
Hercules Samson
Shares in samson 2000 -
equipment 2100 1020
Dividend receivable from samson 640 -
Other current assets 1450 1800
Assets: 6190 2820
Issued capital 1000 200
Retained earnings 2230 600
3230 800
Dividend payable 1200 800
Other current liabilities 1760 1220
2960 2020
Equity and liabilities 7740 2820
The issued capital of both entities remained unchanged since incorporation. The movement in dividend
for the year ended on 31st December 20X1 (current year) is the following:
Hercules Samson
Opening 1st January 1930 400
Net Profit of the period 1500 1000
Approved dividend -1200 -800
Closing retained earnings 2230 600
Hercules recognized the dividend receivable from Samson as income. None of the dividends approved
this year was paid until the end of the reporting period. The goodwill is not impaired and non controlling
interests are recognized at their share of the net assets.