Set out below are the financial statements of Ant Co., its subsidiary Bug Co. and an associated company Nit Co. for the accounting year-end 31 December 20X9.

Statements of comprehensive income for the year ended 31 December 20X9

Ant Co. acquired 80% of the shares in Bug Co. on 1 January 20X7 when the balance on the retained earnings of Bug Co. was $45,000 and the balance on the general reserve of Bug Co. was $12,000. The fair value of the non-controlling interest in Bug on 1 January 20X7 was £21,000. Group policy is to measure non-controlling interests using method 2. Ant Co. also acquired 25% of the shares in Nit Co. on 1 January 20X8 when the balance on Nit’s retained earnings was $22,500 and the general reserve $6,000.

During the year Ant Co. sold Bug Co. goods for $12,000, which included a mark-up of one-third. 90% of these goods were still in inventor y at the end of the year.

Required:

(a) Prepare a consolidated statement of comprehensive income for the year ending 31/12/20X9, including the associated company Nit’s results.

(b) Prepare a consolidated statement of financial position at 31/12/20X9, including the associatedcompany.

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Statements of financial position as at 31 December 20X9 Ant Bug Nit ASSETS Non-current assets Property, plant and equipment at cost 75,000 240,000 135,000 15,750 59,250 Depreciation 150,000 90,000 52,500 82,500 Investment in Bug Investment in Nit 90,000 30,000 Current assets Inventories 105,000 45,000 27,000 98,250 Trade receivables 52,500 27,000 11,250 Current account – Bug Current account – Nit 2,250 Bank 17,250 5,250 4,500 234,000 102,750 Total current assets 58,500 444,000 Total assets 185,250 117,750 EQUITY AND LIABILITIES $I ordinary shares 187,500 45,000 37,500 General reserve 22,500 15,000 9,000 Retained earnings 90,000 37,500 112,500 322,500 150,000 84,000 Current liabilities Trade payables Taxation payable 99,000 18,750 25,500 5,250 6,000 22,500 Current account – Ant 11,250 2,250 185,250 Total equity and liabilities 444,000 117,750