In: Accounting
Rick Ltd wishes to prepare the statement of comprehensive income for the group. The company has one subsidiary undertaking, Rock Ltd. The statements of comprehensive income the two companies for the year ended 31st December 2018 are shown below:
Statement of comprehensive income for the year ended December 31st 2018
Rick Ltd |
Rock Ltd |
|
£000 |
£000 |
|
Sales Revenue |
50,000 |
20,000 |
Cost of goods sold |
(20,000) |
(6,000) |
Gross profit |
30,000 |
14,000 |
Distribution costs |
8,500 |
4,000 |
Admin expenses |
4,000 |
1,500 |
Operating profit |
17,500 |
8,500 |
Dividends received from Beta |
500 |
|
Profit before tax |
18,000 |
8,500 |
Taxation |
(6,300) |
(3,000) |
Profit for the year |
11,700 |
5,500 |
Further information:
Consolidated Statement of Comprehensive Income for the year ended December 31st 2018
Rick Ltd | Rock Ltd | Adjustments | Consolidated Comprehensive Income | |
Sales Revenue | £ 50,000.00 | £ 20,000.00 | -£ 550.00 | £ 69,450.00 |
Cost of Goods Sold | -£20,000.00 | -£ 6,000.00 | £ 550.00 | -£ 25,450.00 |
Gross Profit | £ 30,000.00 | £ 14,000.00 | £ 44,000.00 | |
Distribution Costs | £ 8,500.00 | £ 4,000.00 | £ 12,500.00 | |
Admin Expenses | £ 4,000.00 | £ 1,500.00 | £ 5,500.00 | |
Operating Profit | £ 17,500.00 | £ 8,500.00 | £ 26,000.00 | |
Dividends received from beta | £ 500.00 | £ 500.00 | ||
Profit Before Tax | £ 18,000.00 | £ 8,500.00 | £ 26,500.00 | |
Taxation | -£ 6,300.00 | -£ 3,000.00 | -£ 9,300.00 | |
Profit for the year | £ 11,700.00 | £ 5,500.00 | £ 17,200.00 | |
Share of Minority Interest@25% of profit | -£ 1,375.00 | -£ 1,375.00 | ||
Amount of Consolidated P&L to be taken to BS | £ 15,825.00 |
Since all the stock is sold by Rock ltd, there is no requirement to deduct Unrealised profit from the P&L on inter group transaction.