Reference no: EM132591782

P purchased 70% of S on 1 March 20X9. The statements of profit or loss for year ended 31 December 20X9 are as follows:

                                                          P                                 S

                                                         £ 000                       £ 000

Revenue                                     17,000                12,000

Cost of sales                              (10,000)                 (6,000)

Gross profit                                     7,000                    6,000

Operating Expenses                        (2,500)                    (1,200)

Profit from operation                          4,500                      4,800

Investment income                              1,000                      400

Finance Costs                                     (800)                      (600)

Profit before tax                                   4,700                    4,600

Tax expense                                          (1,400)                  (900)

Profit after tax                                        3,300                  3,700

The following information is also relevant:

1. On 1 June 20X9 S sold goods to P for £800,000 using a mark-up on cost of 25%. One quarter of the inventory is still in S's books at the year end.

2. Goodwill impairment for the year is £400,000.

3. S paid a dividend on 1 July 20X9 of £450,000.

4. P lent S money on 1 August 20X9 and charged interest of £70,000 up to the year end.

Required:

Question 1: Prepare consolidated statement of profit or loss for the period ended 31 December 20X9.