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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