Reference no: EM132941692

Pennington Ltd discontinued one of its divisions in July 2019. The process involved selling off the entire assets of the division plus paying redundancy costs. Up to the point of closure, the division incurred operating profits, exclusive of the redundancy cost and gain or loss on disposal, of $330 million. Redundancy costs for the closed division amounted to an additional $270 million. It also disposed of assets which had cost and accumulated depreciation respectively of $500 million and $300 million respectively. The sales proceeds on disposal amounted to $120 million. The associated taxes have already been accounted for, and the total net effect of the discontinued operation has already been reflected in the administrative expenses associated with continuing operations. For the period ended December 31, 2019, the rest of the company reported revenues of $1,200 million. It also reported cost of sales, administrative expenses and distribution costs of $150 million, $380 million and $220 respectively. Total finance cost for the period amounted to $160 million, and the tax rate stands at 30%.

Required:

Problem 1: Make the statement of profit and loss for the period ended December 31, 2019