6. Lecture question: Fred and Gino Page 33

On 1 April 20X5 Fred acquired 60% of the ordinary share capital of Gino, when the retained earnings of Gino were 20,000.

Statement of profit or loss and other comprehensive income for the year ended 31 March 20X6:

	Fred	Gino	Group
	'000	'000	000
Revenue	420	140
Cost of sales	(130)	(62)
Gross profit	290	78
Operating expenses	(115)	(12)
Operating profit	175	66
Dividend from Gino	15
Profit before tax	190	66
Tax	(35)	(14)
Profit for year	155	52
Attributable to: Owners of parent Non-controlling interest
Profit for year

1. On 4 March 20X6, Fred sold inventory to Gino for 60,000. This inventory cost Fred 40,000 and 50% remained unsold by Gino at 31 March 20X6

2. There was an impairment loss of 6,000 in relation to the goodwill arising on the acquisition of Gino.

Required:

Prepare a consolidated statement of profit or loss and other comprehensive income for the Fred Group for the year ended 31 March 20X6