JEM acquired an interest of 25 in RET on January
JEM acquired an interest of 25% in RET on January 1, 2010, for $50,000. At that date, JEM considered RET to be an associate. At the start of 2013, RET had no net assets. However, during the year RET incurred a loss of $75,000 resulting in liabilities at the end of the year of $75,000. JEM funded this loss as a long-term loan and therefore the net liabilities of RET reflect a loan from JEM of $75,000.
Assuming that JEM is also a parent company and would be preparing consolidated financial statements, calculate the share of profit or loss of RET that would appear on the consolidated comprehensive income statement and the balances in the loan to affiliate and the investment in affiliate accounts on the consolidated statement of financial position.
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