The statements of financial position of Red Ltd and Pink Ltd at 31 December 20X2 are as follows:

Statements of comprehensive income for the year ended 31 December 20X2

Red Ltd acquired 75% of the shares in Pink Ltd on 1 January 20X0 when Pink Ltd’s retained earnings were $30,000 and the balance on Pink’s general reserve was $8,000. The fair value of the non-controlling interest at the date was £32,000. Non-controlling interests are to be measured using method 2.

On 31 December 20X2 Red revalued its non-current assets. The revaluation surplus of £25,000 was credited to the revaluation reserve.

During the year Pink sold Red goods for $9,000 plus a mark-up of one-third. Half of these goods were still in inventor y at the end of the year. Goodwill suffered an impairment loss of 20%.

Required:

Prepare a consolidated statement of comprehensive income for the year ended 31/12/20X2 and a statement of financial position as at thatdate.

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Red Pink ASSETS Non-current assets 225,000 100,000 Depreciation 80,000 30,000 145,000 70,000 Investment in Pink Ltd T 10,000 Current assets Inventories 100,000 30,000 Trade receivables 80,000 40,000 10,000 Current account – Pink Ltd Bank 16,000 8,000 206,000 78,000 Total assets 461,000 148,000 EQUITY AND LIABILITIES Capital and reserves $I common shares 176,000 40,000 General reserve 20,000 14,000 Revaluation reserve 25,000 Retained earnings 100,000 321,000 60,000 114,000 Current liabilities Trade payables Taxation payable 125,996 18,000 14,004 6,000 Current account – Red Ltd 10,000 140,000 34,000 461,000 Total equity and liabilities 148,000