Exercise 22.6 ★ ★ CONSOLIDATION WORKSHEET, CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Financial information for Jasmine Ltd and Poppy Ltd for the year ended 30 June 2016 is shown below: Jasmine Ltd Poppy Ltd Sales revenue Proceeds from sale of offi ce furniture Dividend revenue $78 000 — 4 400 $40 000 3 000 1 600 Total income 82 400 44 600 Cost of sales Other expenses 60 000 10 800 30 000 7 500 Total expenses 70 800 37 500 Profi t before income tax Income tax expense 11 600 (3 000) 7 100 (2 200) Profi t for the year Retained earnings (1/7/15) 8 600 14 500 4 900 2 800 23 100 7 700 Interim dividend paid Final dividend declared 4 000 8 000 2 000 2 400 12 000 4 400 Retained earnings (30/6/16) $11 100 $ 3 300 Additional information

(a) On 1 July 2014, Jasmine Ltd purchased 100% of the shares of Poppy Ltd for $50 000. At that date the equity of the two entities was as follows: Jasmine Ltd Poppy Ltd Asset revaluation surplus Retained earnings Share capital $25 000 14 500 50 000 $ 4 000 2 800 40 000 At 1 July 2014, all the identifi able assets and liabilities of Poppy Ltd were recorded at fair value except for the following: Carrying amount Fair value Plant and equipment (cost $80 000) Inventory $60 000 3 000 $61 000 3 500 All of this inventory was sold by December 2014. The plant and equipment had a further 5-year life. Any valuation adjustments are made on consolidation.

(b) Jasmine Ltd records dividend receivable as revenue when dividends are declared.

(c) The opening inventory of Poppy Ltd included goods which cost Poppy Ltd $2000. Poppy Ltd purchased this inventory from Jasmine Ltd at cost plus 33¹/³%.

(d) Intragroup sales totalled $10 000 for the year. Sales from Jasmine Ltd to Poppy Ltd, at cost plus 10%, amounted to $5600. The closing inventory of Jasmine Ltd included goods which cost Jasmine Ltd $4400. Jasmine Ltd purchased this inventory from Poppy Ltd at cost plus 10%.

(e) On 31 December 2015, Poppy Ltd sold Jasmine Ltd offi ce furniture for $3000. This furniture originally cost Poppy Ltd $3000 and was written down to $2500 when sold. Jasmine Ltd depreciates furniture at the rate of 10% p.a. on cost.