Entity P acquired 100% of the equity shares of Entity S at a cost of $750,000 on October Year 2, when the net assets of Entity S were $600,000. Entity P prepares its

financial statements to 31 December each year. The income statement for each entity for the year to 31 December Year 2 was as follows

Entity P Entity S

Revenue 400,000 260,000

Cost of sales -200,000 -60,000

Gross profit 200,000 200,000

Other income 20,000 -

Distribution costs -50,000 -30,000

Administrative expenses -60,000 -80,000

Other expenses -20,000 -10,000

Finance costs -10,000 -5,000

Profit before tax 80,000 75,000

Income tax expense -30,000 -15,000

Profit for the period 50,000 60,000

Required

Prepare a consolidated income statement for the year to 31 December Year 2, assuming there is no impairment of goodwill during the year.