In: Accounting
Consolidated Financial Statements
Oak plc acquired 70% of Elm Ltd’s equity shares for €300,000 on 1 January 2018. At the date of acquisition Elm Ltd had retained earnings of €190,000.
The two companies’ financial statements are presented as follows as at 31 December 2018:
Statements of Financial Position as at 31 December 2018
Oak plc |
Elm Ltd |
|
€'000 |
€'000 |
|
Assets |
||
Non-current assets |
||
Property, plant and equipment |
1,940 |
200 |
Investment Elm Ltd |
300 |
____ |
2,240 |
200 |
|
Current assets |
||
Inventories |
400 |
220 |
Trade receivables |
450 |
240 |
Cash and bank |
270 |
- |
1320 |
260 |
|
Total assets |
3,360 |
660 |
Equity and liabilities |
||
Equity |
||
Share capital, €1 |
2,000 |
100 |
Retained earnings |
500 |
240 |
Revaluation surplus |
20 |
___ |
2,520 |
340 |
|
Noncurrent liabilities |
||
Convertible loan stock 8% |
500 |
|
Current liabilities |
||
Overdraft |
- |
65 |
Trade payables |
250 |
230 |
Tax payable |
90 |
25 |
740 |
320 |
|
Total equity and liabilities |
3,360 |
660 |
Statements of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2018
Oak plc |
Elm Ltd |
|
€'000 |
€'000 |
|
Sales revenue |
5,000 |
1,000 |
Cost of sales |
2,900 |
600 |
Gross profit |
2,100 |
400 |
Other expenses |
1,710 |
325 |
Profit before interest and tax |
390 |
|
Interest expense |
30 |
|
Profit before tax |
360 |
75 |
Income tax expense |
90 |
25 |
Profit for the year |
270 |
50 |
Other comprehensive income: |
||
Gain on revaluation of property |
20 |
|
Total comprehensive income for the year |
290 |
Additional information:
REQUIRED: