Kirk Ltd acquired 400,000 of the 500,000 1 ordinary shares of Spock Ltd on 1 April 2019 and 30,000 of the 100,000 1 ordinary shares in McCoy Ltd on 1 July 2019. The retained earnings of Kirk Ltd, Spock Ltd and McCoy Ltd at 31 December 2018 were 37,500,000, 22,500,000 and 7,500,000 respectively, and their respective Statements of Profit or Loss for the year ended 31 December 2019 are as follows: Revenue Cost of sales Gross profit Other income Operating expenses Operating profit Finance costs Profit before tax Income Tax expense Profit after tax Kirk Ltd Spock Ltd McCoy Ltd '000 '000 '000 27,000 18,000 13,500 (13,500) (9,000) (6,750) 13,500 9,000 6,750 250 (3,380) (2,300) (1,650) 10,370 6,700 5,100 (1,120) (900) (600) 9,250 5,800 4,500 (2.300) (1,460) (1.100) 6,950 4,340 3.400 Additional Information i. On 1 July 2019 Spock Ltd sold equipment and with a book value of 300,000 (cost 550,000) to Kirk Ltd for 500,000. The remaining useful economic life of the equipment on that date was four years. Both companies include their annual depreciation charge in Operating expenses and their policy is to charge depreciation on a time apportioned basis, ii. During the year ended 31 December 2019, Kirk Ltd sold goods to Spock Ltd for 730,000. The goods were invoiced to Spock Ltd at 20% margin and half of them remain in inventory at the year end. iii. Kirk Ltd received a management fee of 50,000 from Spock Ltd for the nine months ended 31 December 2019. Requirement: Prepare the Consolidated Statement of Profit or Loss of the Kirk Group for the year ended 31 December 2019. 40 marks Kirk Ltd acquired 400,000 of the 500,000 1 ordinary shares of Spock Ltd on 1 April 2019 and 30,000 of the 100,000 1 ordinary shares in McCoy Ltd on 1 July 2019. The retained earnings of Kirk Ltd, Spock Ltd and McCoy Ltd at 31 December 2018 were 37,500,000, 22,500,000 and 7,500,000 respectively, and their respective Statements of Profit or Loss for the year ended 31 December 2019 are as follows: Revenue Cost of sales Gross profit Other income Operating expenses Operating profit Finance costs Profit before tax Income Tax expense Profit after tax Kirk Ltd Spock Ltd McCoy Ltd '000 '000 '000 27,000 18,000 13,500 (13,500) (9,000) (6,750) 13,500 9,000 6,750 250 (3,380) (2,300) (1,650) 10,370 6,700 5,100 (1,120) (900) (600) 9,250 5,800 4,500 (2.300) (1,460) (1.100) 6,950 4,340 3.400 Additional Information i. On 1 July 2019 Spock Ltd sold equipment and with a book value of 300,000 (cost 550,000) to Kirk Ltd for 500,000. The remaining useful economic life of the equipment on that date was four years. Both companies include their annual depreciation charge in Operating expenses and their policy is to charge depreciation on a time apportioned basis, ii. During the year ended 31 December 2019, Kirk Ltd sold goods to Spock Ltd for 730,000. The goods were invoiced to Spock Ltd at 20% margin and half of them remain in inventory at the year end. iii. Kirk Ltd received a management fee of 50,000 from Spock Ltd for the nine months ended 31 December 2019. Requirement: Prepare the Consolidated Statement of Profit or Loss of the Kirk Group for the year ended 31 December 2019. 40 marks