The balance sheets of Mars plc and Jupiter plc at 31 December 20X2 are as follows:

Mars acquired 80% of the shares in Jupiter on 1 Januar y 20X0 when Jupiter’s retained ear nings were £80,000 and the balance on Jupiter’s general reser ve was £18,000. During the year Mars sold Jupiter goods for £18,000 which represented cost plus 50%. Half of these goods were still in stock at the end of the year.
During the year Mars and Jupiter paid dividends of £180,000 and £11,250 respectively. The opening balances of retained ear nings for the two companies were £156,000 and £114,750 respectively.
Required:
Prepare a consolidated income statement for the year ended 31/12/20X2, a balance sheet as at that date, and a consolidated statement of changes in equity. Also prepare the retained earnings columns of the consolidated statement of changes in equity for the year.

Transcribed Image Text:

Mars Jupiter ASSETS Non-current assets at cost 550,000 225,000 Depreciation 220,000 67,500 330,000 157,500 Investment in Jupiter 187,500 Current assets Inventories 225,000 67,500 Trade receivables 180,000 90,000 Current account - Jupiter 22,500 Bank 36,000 18,000 463,500 175,500 Total assets 981,000 333,000