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.

Ant Co. acquired 80% of the shares in Bug Co. on 1 Januar y 20X7 when the balance on the retained ear nings of Bug Co. was $45,000 and the balance on the general reser ve of Bug Co. was $12,000.
Ant Co. also acquired 25% of the shares in Nit Co. on 1 Januar y 20X8 when the balance on Nit’s retained ear nings was $22,500 and the general reser ve $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 income statement for the year ending 31/12/20X9, including the associated company Nit’s results.

(b) Prepare a consolidated balance sheet at 31/12/20X9, including the associated company.

Balance sheets as at 31 December 20X9 Ant Bug Nit $ $ $ ASSETS Non-current assets Property, plant and equipment at cost 240,000 135,000 75,000 Depreciation 150,000 52,500 15,750 90,000 82,500 59,250 Investment in Bug 90,000 Investment in Nit 30,000 Current assets Inventories 105,000 45,000 27,000 Trade receivables 98,250 52,500 27,000 Current account - Bug 11,250 Current account - Nit 2,250 Bank 17,250 5,250 4,500 Total current assets 234,000 102,750 58,500 Total assets 444,000 185,250 117,750 EQUITY AND LIABILITIES $1 shares 187,500 45,000 37,500 General reserve 22,500 15,000 9,000 Retained earnings 112,500 90,000 37,500 322,500 150,000 84,000 Current liabilities Trade payables 99,000 18,750 25,500 Taxation payable 22,500 5,250 6,000 Current account - Ant 11,250 2,250 Total equity and liabilities 444,000 185,250 117,750