Illustrations of retained profits brought forward, Financial Accounting

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Illustrations of retained profits brought forward

H Ltd acquired 75% of the ordinary shares of S Ltd since S Ltd was incorporated. The Summarized income statement for the two companies for the year ending 31 December

20X2 is as follows:

	H Ltd	S Ltd
	£	£
Sales revenue	75,000.00	38,000.00
Cost of sales	(30,000.00)	(20,000.00)
Gross profit	45,000.00	18,000.00
Operating expenses	(14,000.00)	(8,000.00)
Profit before tax	31,000.00	10,000.00
Taxation	(10,000.00)	(2,000.00)
Profit after tax	21,000.00	8,000.00
Retained profit b/f	87,000.00	17,000.00
Retained profit c/f	108,000.00	25,000.00

Required:
Prepare the consolidated income statement for the year ended 31 December 20X2.

H Ltd. And Its Subsidiary Consolidated Income Statement for year ended 31/12/2002
	£ ‘000’	£ ‘000’
Revenue(75+38)		113
Cost of sales(30+20)		(50)
Gross profit		63
Operating expenses(14+8)		22
Profit before tax		41
Income tax expense(10+2)		(12)
Profit after tax		29
Profit attributable to minority interest		(2)
Profit attributable to holding company		27
Retained profits b/f		99.75
Retained profit b/f		126.75

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