(a) You have been provided with the statements of profit or loss and other comprehensive income...

    

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(a) You have been provided with the statements of profit or loss and other comprehensive income of Back ple and Stop Limited for the year ended 31 December 2019. 3. Statements of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 Revenue Cost of sales Gross profit Administration costs Selling and distribution costs Finance cost Profit before tax Income tax expense Profit for the year Back ple £'000 28,900 (14,800) 14,100 (6,300) (4,980) (440) 2,380 (510) 1.870 Stop Limited £'000 9,100 (4,120) 4,980 (1,450) (1,890) (150) 1,490 (280) 1.210 Additional Information 1. On 1 January 2018, Back plc purchased 80% of the £1 ordinary shares in Stop Limited at a cost of £5,900,000. At the acquisition date, the fair value of assets was equal to their carrying amount with the exception of property that had a fair value greater than its carrying amount by £600,000. The remaining useful life of the property was 40 years on January 2018. 2. The goodwill arising on the acquisition of Stop Limited has not been impaired. During the year ended 31 December 2019, Stop Limited sold goods worth £500,000 to Back ple. One fifth of these goods was still on hand at 31 December 2019. Stop Limited sets its selling price to achieve a margin of 25% Requirement Prepare the consolidated statement of profit or loss and other comprehensive income of the Back Group for the year ended 31 December 2019. 10 Marks (b) You have been provided with the statements of financial position of Customs ple and Union Limited as at 31 December 2019. Statements of Financial Position as at 31 December 2019 Customs ple £'000 1. Assets Non-current assets Property, plant and equipment Investment in Union Limited at cost Current assets Inventory Receivables Cash in hand and at bank Equity and Liabilities Equity Called up share capital Retained earnings Current liabilities 740 Operating profit Dividend received from Union Limited 95 835 85 215 87 387 1,222 300 615 915 307 1,222 Customs plc £'000 370 9 (160) 219 Union Limited E$'000 Taxation charge Dividend paid Profit retained for the financial year No other dividends were paid or proposed by either company. 815 815 Additional Information On 1 January 2010 Customs plc purchased 80% of the shares of Union Limited, a company incorporated and operating in a country whose currency is the Eurasian dollar (ES). The retained earnings of Union Limited amounted to E$100,000 on 1 January 2010. For the purposes of measuring non-controlling interests at the date of acquisition, the proportionate share method equated to the fair value method. Goodwill was impaired for the first time by £5,000 during the year ended 31 December 2019. 2. The financial statements for the year ended 31 December 2019 included the following: 60 80 20 160 975 500 355 855 120 975 Union Limited E$'000 297 (77) (60) 160 3. The following exchange rates have been ascertained: 1 January 2010 31 December 2018 31 December 2019 Average rate for the year ended 31 December 2019 E$10-£1 E$6 £1 E$5 £1 E$5.5-£1 Requirement Prepare the consolidated statement of financial position of Customs Group as at 31 December 2019, showing any foreign exchange gains and losses arising. 15 Marks Total 25 Marks mligtition (a) You have been provided with the statements of profit or loss and other comprehensive income of Back ple and Stop Limited for the year ended 31 December 2019. 3. Statements of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 Revenue Cost of sales Gross profit Administration costs Selling and distribution costs Finance cost Profit before tax Income tax expense Profit for the year Back ple £'000 28,900 (14,800) 14,100 (6,300) (4,980) (440) 2,380 (510) 1.870 Stop Limited £'000 9,100 (4,120) 4,980 (1,450) (1,890) (150) 1,490 (280) 1.210 Additional Information 1. On 1 January 2018, Back plc purchased 80% of the £1 ordinary shares in Stop Limited at a cost of £5,900,000. At the acquisition date, the fair value of assets was equal to their carrying amount with the exception of property that had a fair value greater than its carrying amount by £600,000. The remaining useful life of the property was 40 years on January 2018. 2. The goodwill arising on the acquisition of Stop Limited has not been impaired. During the year ended 31 December 2019, Stop Limited sold goods worth £500,000 to Back ple. One fifth of these goods was still on hand at 31 December 2019. Stop Limited sets its selling price to achieve a margin of 25% Requirement Prepare the consolidated statement of profit or loss and other comprehensive income of the Back Group for the year ended 31 December 2019. 10 Marks (b) You have been provided with the statements of financial position of Customs ple and Union Limited as at 31 December 2019. Statements of Financial Position as at 31 December 2019 Customs ple £'000 1. Assets Non-current assets Property, plant and equipment Investment in Union Limited at cost Current assets Inventory Receivables Cash in hand and at bank Equity and Liabilities Equity Called up share capital Retained earnings Current liabilities 740 Operating profit Dividend received from Union Limited 95 835 85 215 87 387 1,222 300 615 915 307 1,222 Customs plc £'000 370 9 (160) 219 Union Limited E$'000 Taxation charge Dividend paid Profit retained for the financial year No other dividends were paid or proposed by either company. 815 815 Additional Information On 1 January 2010 Customs plc purchased 80% of the shares of Union Limited, a company incorporated and operating in a country whose currency is the Eurasian dollar (ES). The retained earnings of Union Limited amounted to E$100,000 on 1 January 2010. For the purposes of measuring non-controlling interests at the date of acquisition, the proportionate share method equated to the fair value method. Goodwill was impaired for the first time by £5,000 during the year ended 31 December 2019. 2. The financial statements for the year ended 31 December 2019 included the following: 60 80 20 160 975 500 355 855 120 975 Union Limited E$'000 297 (77) (60) 160 3. The following exchange rates have been ascertained: 1 January 2010 31 December 2018 31 December 2019 Average rate for the year ended 31 December 2019 E$10-£1 E$6 £1 E$5 £1 E$5.5-£1 Requirement Prepare the consolidated statement of financial position of Customs Group as at 31 December 2019, showing any foreign exchange gains and losses arising. 15 Marks Total 25 Marks mligtition

Answer rating: 100% (QA)

Consolidate statement of profit or loss and other comprehensive income 000 Revenue 37500 Cost of sales 18445 Gross profit 19055 Administration costs 7... View the full answer