Given below the financial statements of Kimberly, Kloe and Kyle for financial year ended 31 December 2015. Statements of Financial Position as at 31 December 2015 Kimberly RM'000 Kloe RM'000 Kyle RM'000 Assets Non-current assets Property, plant and equipment 32,000 25.000 20,000 Investments 33,500 65,500 25,000 20,000 Current assets Cash at bank and in hand 9,500 2,000 4,000 Trade receivables 20,000 8,000 17,000 Inventory 30,000 18,000 18,000 125,000 53,000 59,000 Equity and liabilities Share capital 40,000 10,000 15,000 Share premium account 6,500 Retained earnings 55,000 37,000 27,000 101,500 47,000 42,000 Current liabilities 23,500 6,000 17,000 125,000 53,000 59,000 Statements of Profit or Loss for the year ended 31 December 2015 Kimberly Kloe Kyle RM'000 RM'000 RM'000 Revenue 125,000 117,000 82,000 Cost of sales (65,000) (64,000) (42,000) Gross profit 60,000 53,000 40,000 Distribution costs (21,000) (14,000) (16,000) Administrative expenses (14,000) (8,000) (7,000) Profit before taxation 25,000 31,000 17,000 Income tax expense (10,000) (9,000) (5,000) Profit after tax 15.000 22.000 12.000 Statements of Changes in Equity (extract) for the year ending 31 December 2015 Kimberly Kloe RM'000 RM'000 Retained earnings brought forward 40,000 15,000 Kyle RM'000 15,000 Retained profit for the financial year 15,000 22,000 12,000 Dividends Retained earnings carried forward 55,000 37,000 27.000 You are given the following additional information: 1. 2. 3. 4. 5. Kimberly owns 80% of Kloe's shares. These were purchased in 2012 for RM20.5 million cash, when the balance on Kloe's retained earnings stood at RM7 million. In 2010, Kimberly purchased 60% of the shares of Kyle by the issue of shares with a nominal value of RM6.5 million. These shares were issued at a premium of RM6.5 million. At that date, the retained earnings of Kyle stood at RM3 million and the fair value of the net assets of Kyle was RM24 million. Included in the inventory of Kyle and Kloe at 31 December 2015 are goods purchased from Kimberly for RM5.2 million and RM3.9 million respectively. Kimberly aims to earn a profit of 30% on cost. Total sales from Kimberly to Kyle and to Kloe were RM8 million and RM6 million respectively. Kimberly and Kloe each proposed a dividend before the year end of RM2 million and RM2.5 million respectively. No accounting entries have yet been made for these. Kimberly has carried out annual impairment tests on goodwill in accordance with MFRS 136. The estimated amount of goodwill at 31 December 2012 was RM5 million and at 31 December 2015 was RM4.5 million. Any current year impairment losses should be treated as part of administrative expenses. Required: a. Prepare the Consolidated Statement of Profit or Loss for the year ended 31 December 2015. b. Compute the group retained profit as at 31 December 2015.