Illustration 2 P Co acquired 75% of the ordinary shares of S Co on that company's incorporation in 20X3. The summarized income statements and movement on retained earnings of the two companies for the year ending 31 December 20X6 are set out below. Sales revenue Less: Cost of sales Gross profit Administrative expenses Profit before tax Income tax expense Profit for the year Note: Movement on retained earnings Retained earnings brought forward Profit for the year Retained earnings carried forward Required P Co S Co $ $ 75000 38,000 20,000 30,000 18,000 45,000 (14,000) 8,000) 31,000 10,000 (10,000) 2,000 21,000 8,000 8,000 87,000 17,000 21,000 8,000 108,000 25,000 Prepare the consolidated income statement and extract from the statement of changes in equity showing retained earnings and non-controlling interest