QUESTION 1 (January 2020)

(a) You have been provided with the statements of profit or loss and other comprehensive income of Back plc and Stop Limited for the year ended 31 December 2019. Statements of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 Back plc 000 Stop Limited 000 Revenue 28,900 9,100 Cost of sales (14,800) (4,120) Gross profit 14,100 4,980 Administration costs (6,300) (1,450) Selling and distribution costs (4,980) (1,890) Finance cost (440) (150) Profit before tax 2,380 1,490 Income tax expense (510) (280) Profit for the year 1,870 1,210 Additional Information 1. On 1 January 2018, Back plc purchased 80% of the 1 ordinary shares in Stop Limited at a cost of 5,900,000. At the acquisition date, the fair value of assets was equal to their carrying amount with the exception of property that had a fair value greater than its carrying amount by 600,000. The remaining useful life of the property was 40 years on 1 January 2018. 2. The goodwill arising on the acquisition of Stop Limited has not been impaired. 3. During the year ended 31 December 2019, Stop Limited sold goods worth 500,000 to Back plc. One fifth of these goods was still on hand at 31 December 2019. Stop Limited sets its selling price to achieve a margin of 25%.

Requirement Prepare the consolidated statement of profit or loss and other comprehensive income of the Back Group for the year ended 31 December 2019. 10 Marks

(b) You have been provided with the statements of financial position of Customs plc and Union Limited as at 31 December 2019. Statements of Financial Position as at 31 December 2019 Customs plc Union Limited 000 E$000 Assets Non-current assets Property, plant and equipment 740 815 Investment in Union Limited at cost 95 - 835 815 Current assets Inventory 85 60 Receivables 215 80 Cash in hand and at bank 87 20 387 160 1,222 975 Equity and Liabilities Equity Called up share capital 300 500 Retained earnings 615 355 915 855 Current liabilities 307 120 1,222 975 Additional Information 1. On 1 January 2010 Customs plc purchased 80% of the shares of Union Limited, a company incorporated and operating in a country whose currency is the Eurasian dollar (E$). The retained earnings of Union Limited amounted to E$100,000 on 1 January 2010. For the purposes of measuring non-controlling interests at the date of acquisition, the proportionate share method equated to the fair value method. Goodwill was impaired for the first time by 5,000 during the year ended 31 December 2019. 2. The financial statements for the year ended 31 December 2019 included the following: Customs plc Union Limited 000 E$000 Operating profit 370 297 Dividend received from Union Limited 9 - Taxation charge (160) (77) Dividend paid - (60) Profit retained for the financial year 219 160 No other dividends were paid or proposed by either company. 3. The following exchange rates have been ascertained: 1 January 2010 E$10 = 1 31 December 2018 E$6 = 1 31 December 2019 E$5 = 1 Average rate for the year ended 31 December 2019 E$5.5 = 1

Requirement Prepare the consolidated statement of financial position of Customs Group as at 31 December 2019, showing any foreign exchange gains and losses arising. 15 Marks Total 25

Marks what is the nci, goodwill, trade payables, trade receivables, cost of goods sold, retained earnings, foreign exchange translation reserve, total revenue?