10. The following balances have been extracted from the books of ALK plc, as at 31 July 2015 450 374 000 Administration and distribution costs 290 Bank 8 Trade Payables 252 Trade Receivables 134 Interest on long term loans 9 Investments (long term) Investment income 20 Long term loans 450 Land and buildings - cost 1500 Land and buildings - depreciation 31 July 2014 15 Materials and other manufacturing costs 1000 Ordinary Dividends paid 60 Ordinary share capital 1200 Retained Earnings Plant and machinery - cost 300 Plant and machinery - depreciation at 31 July 2014 100 Sales 2200 Inventory at 31 July 2014 210 Wages and salaries - manufacturing 400 Wages and salaries - administration and Distribution 250 Additional information: 1. Corporation tax based on the year's profit is estimated at 30,000. 2. Inventory at 31 July 2015 was 180,000. 3. Land and buildings are to be depreciated at the rate of 4%, and plant and machinery at 20%, reducing balance. 4. The company's ordinary share capital is 1.2 million shares at 1 per share, fully paid. The directors have proposed that no final dividend will be paid. (0) Prepare ALK pic's Statement of Profit or Loss for the year to 31 July 2015, and a Statement of Financial Position at that date. You should clearly show your workings for calculating the book value of tangible assets and the cost of goods sold. [15 marks) (il) Explain what is meant by the process of consolidation of financial statements and why it is necessary for a group, to publish a set of consolidated financial statements. [5 marks] [Total 20 marks]