Set out below are the draft income statements of P and its subsidiary S for the year
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Question:
Set out below are the draft income statements of P and its subsidiary S for the year ended 31 December 20X7.
On the 1 January 20X6 P purchased 75% of the ordinary shares in S.
| P | S | ||
| Revenue | $ 300.00 | $ 150.00 | |
| Cost of Sales and expenses | -$ 180.00 | -$ 70.00 | |
| Gross Profit | $ 120.00 | $ 80.00 | |
| Operating expenses | -$ 47.00 | -$ 23.00 | |
| Profit from Operations | $ 73.00 | $ 57.00 | |
| Finance Costs | -$ 2.00 | ||
| Profit before taxation | $ 73.00 | $ 55.00 | |
| Tax | -$ 25.00 | -$ 16.00 | |
| Profit for the year | $ 48.00 | $ 39.00 |
During the year S sold goods to P for $20,000, making a mark up of one third. Only 20% of these goods were sold before the end of the year, the rest were still in inventory.
P values non-controlling interest using the fair value method.
Prepare the consolidated income statement for the year ended 31 December 20X7
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Related Book For 
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
