Assignment Scenario 02 Question 2 The Income statement for two entities, Black Stone Co and Max Co, for the year ended 31st Dec 2019 are presented below: Black Stone Co Max Co $ 000 $ 000 Sales Revenue 60,000 44800 Cost of sales (30,800) (18200) Gross profit 29,200 26,600 Administrative expenses (15,200) (15,000) Operating profit 14,000 11,600 Finance costs (2,000) (3,000) INTERMEDIATE ACCOUNTING -2,-BAAF-SEM4- ASSIGNMENT -1 -BRIEF FALL 2020-21 Page 5 Profit before tax 12,000 8,600 Taxation (3,600) (2,580) Profit for the year 8,400 6,020 The following notes are relevant to the preparation of the consolidated financial statement of profit or loss : (1) Black Stone Co bought 80% of the ordinary shares in Max Co several years ago. (ii) During the year ended 31st Dec 2019, Max Co sold goods to Black Stone Co for $ 600,000 making a cost mark up of 25%. One Quarter of these goods remained in the inventory of Black Stone Co at the year end. (iii) At 31st Dec 2019, both Black Stone Co and Max Co revalued land and buildings, and which has not yet been accounted for in the individual financial statements of each entity. The surplus arising upon revaluation was $ 30,000 and $ 10,000, respectively. You are required to A. Prepare a consolidated statement of profit or loss and other comprehensive income for the year 31st Dec 2019. (Provide relevant workings where needed). (Q.2- A-4 Marks) B. As per IAS 1 requirement for a consolidated statement you are required to: i. Calculate & account Profit after tax attributable to Parent and Non-controlling interest. (Q.2-B(i)-1 Marks) ii. Calculate & account total comprehensive income for the year attributable to Parent and Non-controlling interest. (Q.2-B(ii)-1 Marks) C. Discuss how does the application of IFRS enhance financial reporting of the company. (Q.2-C-4 Marks) (Total Marks Q.2= 10 Marks) Note: For solving question no. 2, you should use information given in Assignment Scenario 02. Assignment Scenario 02 Question 2 The Income statement for two entities, Black Stone Co and Max Co, for the year ended 31st Dec 2019 are presented below: Black Stone Co Max Co $ 000 $ 000 Sales Revenue 60,000 44800 Cost of sales (30,800) (18200) Gross profit 29,200 26,600 Administrative expenses (15,200) (15,000) Operating profit 14,000 11,600 Finance costs (2,000) (3,000) INTERMEDIATE ACCOUNTING -2,-BAAF-SEM4- ASSIGNMENT -1 -BRIEF FALL 2020-21 Page 5 Profit before tax 12,000 8,600 Taxation (3,600) (2,580) Profit for the year 8,400 6,020 The following notes are relevant to the preparation of the consolidated financial statement of profit or loss : (1) Black Stone Co bought 80% of the ordinary shares in Max Co several years ago. (ii) During the year ended 31st Dec 2019, Max Co sold goods to Black Stone Co for $ 600,000 making a cost mark up of 25%. One Quarter of these goods remained in the inventory of Black Stone Co at the year end. (iii) At 31st Dec 2019, both Black Stone Co and Max Co revalued land and buildings, and which has not yet been accounted for in the individual financial statements of each entity. The surplus arising upon revaluation was $ 30,000 and $ 10,000, respectively. You are required to A. Prepare a consolidated statement of profit or loss and other comprehensive income for the year 31st Dec 2019. (Provide relevant workings where needed). (Q.2- A-4 Marks) B. As per IAS 1 requirement for a consolidated statement you are required to: i. Calculate & account Profit after tax attributable to Parent and Non-controlling interest. (Q.2-B(i)-1 Marks) ii. Calculate & account total comprehensive income for the year attributable to Parent and Non-controlling interest. (Q.2-B(ii)-1 Marks) C. Discuss how does the application of IFRS enhance financial reporting of the company. (Q.2-C-4 Marks) (Total Marks Q.2= 10 Marks) Note: For solving question no. 2, you should use information given in Assignment Scenario 02