Question
Planetplc,a publiclimitedcompanyisexpanding the group business.On 1January2020,Planetplcacquired75% interest in SpaceLtdand25%interest inAeroLtd.Planetplcis represented on AeroLtd'sboard of directors.Below are the statement of comprehensive income ofPlanetplc,SpaceLtdandAeroLtdfor the year ended
Planetplc,a publiclimitedcompanyisexpanding the group business.On 1January2020,Planetplcacquired75% interest in SpaceLtdand25%interest inAeroLtd.Planetplcis represented on AeroLtd'sboard of directors.Below are the statement of comprehensive income ofPlanetplc,SpaceLtdandAeroLtdfor the year ended 31December2020.
Planetplc
($'000)
SpaceLtd
($'000)
AeroLtd
($'000)
Revenue
45,000
24,000
10,000
Cost of sales
(26,000)
(11,000)
(6,800)
Gross Profit
19,000
13,000
3,200
Operating expenses
(6,060)
(3,500)
(1,700)
Operating profit
12,940
9,500
1,500
Management services to SpaceLtd
20
-
-
Dividend from SpaceLtd
600
-
-
Finance Income
200
-
-
Finance costs
(150)
(120)
(10)
Profit before tax
13,790
9,380
1,490
Taxation
(4,800)
(2,780)
(450)
Profit aftertax
8,990
6,600
1,040
Additional information:
i)Planetplctrades with SpaceLtdand during the year.Planetplcsoldgoods for $3,000,000 toSpaceLtd.
ii)Planetplcsells toSpaceLtdat cost plus25%.Halfof thesegoods remain unsold inSpaceLtd.
iii)Planetplchasrecognized a dividenddeclared and paid by SpaceLtdof $600,000 during the year.
iv)Included in theoperating expenses of SpaceLtdis an amount of $200,000 management fees charged byPlanetplcfor the services provided.
v)Planetplccharges SpaceLtd4%interestfortheadvancesof $5,000,000grantedto SpaceLtdon 1 July 2020.
vi)Investment in AeroLtdis impaired by $50,000
REQUIRED:
(a)Preparethe consolidated statement of comprehensive income for the year ended 31 December2020.(Show all workings)
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