The following are the trial balances of ATH Ltd, GLE Ltd, and FRN Ltd as at 31 December 20X8.

ATH Ltd acquired the shares in FRN Ltd on 31 December 20X6, when the credit balance on the profit and loss account of FRN Ltd was £700, and acquired the shares in GLE Ltd on 31 December 20X7. No dividend was paid by either ATH Ltd or GLE Ltd for the year 20X7.

No dividend has been paid by FRN Ltd for the years 20X6, 20X7 and 20X8 and none is proposed.

The directors of ATH Ltd propose to pay a dividend of £7,000 for 20X8.

The sales of GLE Ltd for 20X8 (£116,000) include £1,000 for goods sold to FRN Ltd and this amount has been debited to purchases account in the books of FRN Ltd. All these goods were sold by FRN Ltd during 20X8.

Required:

A consolidated trading and profit and loss account for the year 20X8 and a consolidated balance sheet as on 31 December 20X8 (not necessarily in a form for publication). Ignore depreciation of fixed assets and taxation.

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Ordinary share capital (shares of £1 each, fully paid) 7 per cent cumulative preference share capital (shares of £1 each, fully paid) Profit and loss account - balance at 31.12.20X7 Current liabilities Sales Dividend received from GLE Ltd Fixed assets Current assets 24,000 ordinary shares in GLE Ltd at cost 20,000 ordinary shares in FRN Ltd at cost Cost of goods sold General expenses Dividend for 20X8, paid on 31.12.20X8 ATH Ltd £ 100,000 15,600 20,750 194,000 1,200 331,550 45,000 46,000 33,700 21,250 153,000 32,600 331,550 GLE Ltd £ 30,000 6,000 15,900 116,000 167,900 29,000 27,500 87,000 22,900 1,500 167,900 FRN Ltd £ 20,000 5,000 1,900 18,350 84,000 129,250 25,000 22,500 63,000 18,750 129,250