Darwin acquired 80% of Henry's shares for $300,000 on 1 January 2018. At that date Henry had retained earnings of $190,000. On December 31, 2018 Darwin sold goods which cost $80,000 to Henry, at an invoiced cost of $100,000. The fair value of the non-controlling interest in Henry at the date of acquisition was $60,000. The two companies' draft financial statements as at 31 December 2018 are shown below. $'000 Profit for the year 421 Dividend (98) 323 During the year the following important events took place: 1) Properties were revalued by $105,000 increase. 2) $200,000 equity shares of $1 were issued during the year at a 25c premium The opening equity balance were as follows: Issued capital 400 Share premium 50 Other components of equity 165 Retained earnings 310 925 Statement of Profit or Loss for year ended Statement of Financial Position as at 31 December 2018 Darwin Henry Assets $'000 $'000 Non-current assets: Property , plant and Equipment 1940 200 Investment in Henry 300 2240 200 Current assets : Inventories 500 120 Trade receivables 650 40 Bank and cash 170 35 1320 195 Total assets 3560 395 Equity and liabilities Equity Share capital 2000 100 Retained earnings 520 240 2520 340 Current liabilities Trade payables 910 30 Tax 130 25 1040 55 Total equity and liabilities 3560 395 Darwin Henry $'000 $'000 Revenue 5,000.00 1,000.00 Cost of sales (2,900.00) (600.00) Gross profit 2,100.00 400.00 Administrative expense (1,000.00) (200.00) Distribution costs (700.00) (120.00) Profit before tax 400.00 80.00 Income tax expense (130.00) (25.00) Profit for the year 270.00 55.00 Required a) Prepared the consolidated statement of profit or loss for year ended 31 December 2018. (10marks) b) Prepare the consolidated statement of financial position as at year ended 31 December 2018.

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