Calculate provision for unrealized profit

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Reference no: EM132616127

The Income statement for two entities, Black Company and Bury Company, for the year ended 31. Dec 2019 are presented below:

	Black Co	Bury Co
	OMR '000¹	OMR '000'
Sales Revenue	4,000	2,800
Cost of sales	(2300)	(1,700)
Gross profit	1,700	1,100
Administrative expenses	(700)	(500)
Operating profit	1,000	600
Finance costs	(200)	(120)
Profit before tax	800	480
Taxation	(160)	(100)
Profit for the year	640	380

The following notes are relevant to the preparation of the consolidated financial statements:

(i) Black Company bought 80% of the ordinary shares in Bury Company several years ago.

(ii) During the year ended 31. December 2019, Bury Company sold goods to Black Company for OMR 100,000 making a cost mark up of 20%. One fifth of these goods remained in the inventory of Black Company at the year end.

(iii) At 31. December 2019, both Black and Bury revalued land and buildings and which has not yet been accounted for in the individual financial statements of each entity. The surplus arising upon revaluation was OMR 12,000 and OMR 6,000 respectively.

You are required to

A. Calculate Provision for Unrealized Profit.

B. Prepare a consolidated statement of profit or loss and other comprehensive income for the year 31. December 2019.

C. Calculate Profit after tax attributable to Parent and Non-controlling interest

D. Calculate total comprehensive income for the year to Parent and Non-controlling interest.

Reference no: EM132616127

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