Reference no: EM132855007
Question - The statements of comprehensive income for Alicante plc, London plc and Madrid plc for the year ended 31 October 2020 are as follows:
Statements of comprehensive income for the year ended 31 October 2020
|
|
Alicante £000
|
London £000
|
Madrid £000
|
|
Sales
|
135,000
|
77,000
|
66,500
|
|
Cost of sales
|
45,000
|
32,000
|
24,000
|
|
Gross profit
|
90,000
|
45,000
|
42,500
|
|
Expenses
|
23,500
|
26,600
|
37,000
|
|
Dividends received
|
6,850
|
N/A
|
3,000
|
|
Profit before tax
|
73,350
|
18,400
|
8,500
|
|
Corporate Taxation
|
20,350
|
8,750
|
3,500
|
|
Profit for the year
|
53,000
|
9,650
|
5,000
|
|
Dividends paid in year
|
26,000
|
5,250
|
2,000
|
The following information is also relevant:
1. Alicante plc acquired 60% of the shares in London plc on 1 November 2016 for a cash consideration of £51,500,000. The balance on the retained earnings of London plc was £45,000,000 and the balance on the general reserve of London plc was £20,000,000 on that date.
2. Alicante plc also acquired 30% of the shares in Madrid plc on 1 November 2017. The balance on Madrid plc's retained earnings was £12,500,000 and the general reserve of Madrid plc was £2,000,000 on that date. There was a revaluation on Madrid Plc's net assets on that date and this revaluation has been adjusted in the statements.
3. During the year Alicante plc sold London plc goods for £7,000,000 which included a mark-up of 40%. Fifty-five percent (55%) of these goods were still in inventory at the end of the year.
4. As at 31 October 2020, goodwill impaired by 20%, and the Method 1 is used to calculate the goodwill.
5. During the year, the corporate taxation expense at Alicante plc has been overestimated by £1,500,000, and this has not been adjusted.
Required - Make Alicante plc's consolidated statement of comprehensive income for the year to 31 October 2020. All workings should be shown.