Solution-Prepare a draft consolidated statement of profit

Prepare a draft consolidated statement of profit

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Reference no: EM13558021

Simple consolidation

Boo acquired 80% of Goose's equity for $300,000 on 1 January 20X8. At the date of acquisition Goose had retained earnings of $190,000. On 31 December 20X8 Boo despatched goods which cost $80,000 to Goose, at an invoiced cost of $100,000. Goose received the goods on 2 January 20X9 and recorded the transaction then. The two companies' draft financial statements as at 31 December 20X8 are shown below.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 20X8

	Boo	Goose
	$'000	$'000
Revenue	5,000	1,000
Cost of sales	2,900	600
Gross profit	2,100	400
Other expenses	1,700	320
Profit before tax	400	80
Income tax expense	130	25
Profit for the year	270	55
Other comprehensive income:
Gain on revaluation of property	20	-
Total comprehensive income for the year	290	55

STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 20X8

Assets
Non-current assets	1,940	200
Property, plant and equipment	300	-
Investment in Goose	2,240	200

Current assets	500	120
Inventories	650	40
Trade receivables	170	35
Bank and cash	1,320	195
	3,560	395

Total assets
Equity and liabilities
Equity	2,000	100
Share capital	500	240
Retained earnings	20	-
Revaluation surplus	2,520	340

Current liabilities	910	30
Trade payables	130	25
Tax	1,040	55
Total equity and liabilities	3,560	395

Required

Prepare a draft consolidated statement of profit or loss and other comprehensive income and statement of financial position. It is the group policy to value the non-controlling interest at acquisition at fair value. The fair value of the non-controlling interest in Goose at the date of acquisition was $60,000.

Reference no: EM13558021

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Prepare a draft consolidated statement of profit

Reference no: EM13558021

Reference no: EM13558021

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