The following are the financial statements of the parent company Swish plc, a subsidiary company Broom and an associate company Handle.

Statement of comprehensive income for the year ended 31 December 20X3

Swish acquired 90% of the shares in Broom on 1 January 20X1 when the balance on the retained earnings of Broom was £60,000 and the balance on the general reserve of Broom was £16,000.

Swish also acquired 25% of the shares in Handle on 1 January 20X2 when the balance on Handle’s accumulated retained profits was £30,000 and the general reserve £8,000.

During the year Swish sold Broom goods for £16,000, which included a mark-up of one-third. 80% of these goods were still in inventor y at the end of the year.

Non-controlling interests are measured using method 1.

Required:

(a) Prepare a consolidated statement of comprehensive income, including the associated company Handle’s results, for the year ended 31 December 20X3.

(b) Prepare a consolidated statement of financial position as at 31 December 20X3. The group policy is to measure non-controlling interests using method1.

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Statements of financial position as at 31 December 20X3 Handle Swish Broom ASSETS Non-current assets Property, plant and equipment at cost Depreciation 100,000 320,000 180,000 200,000 120,000 70,000 21,000 79,000 T10,000 Investment in Broom 140,000 40,000 Investment in Handle Current assets Inventories 120,000 60,000 36,000 1 30,000 Trade receivables 70,000 36,000 Current account – Broom 15,000 3,000 Current account - Handle Bank 7,000 6,000 24,000 Total current assets 292,000 137,000 78,000 247,000 Total assets 592,000 157,000 EQUITY AND LIABILITIES £l ordinary shares 250,000 60,000 50,000 20,000 120,000 200,000 General reser ve 30,000 12,000 Retained earnings 150,000 50,000 430,000 2,000וו Current liabilities Trade payables Taxation payable 132,000 25,000 34,000 30,000 7,000 8,000 3,000 Current accout – Swish 15,000 592,000 Total equity and liabilities 247,000 157,000