Question 1

Sinton Plc acquired 75% of the issued share capital and voting rights of Green Ltd on 1 April 2018. Extracts from their statement of comprehensive income for the year ended 31 March 2019 are shown below.

Continuing operations	Sinton Plc 000	Green Ltd 000
Revenue	48,400	17,200
Cost of sales	-31,200	-9,800
Gross profit	17,200	7,400
Other income	600	-
Distribution costs	-8,000	-3,200
Administration expenses	-4,200	-1,000
Profit before tax	5,600	3,200

Further information

• During the year Green Ltd sold goods which had cost 50,000 to Sinton Plc for 80,000. Two-thirds of these goods still remain in inventory at the end of the year.
• Other income of Sinton Plc consists of a dividend of 500,000 received from Green Ltd and rental income received from another company.

A ) Required - prepare the consolidated statement of comprehensive income for the year ended 31March 2019.

Severn Plc acquired 60% of the issued share capital and voting rights of Teme Ltd on 1April 2017 for 700,000 and retained earnings of 250,000.

Extracts from the statement of financial position for the two companies on 31 March 2018 are as follows:

	Severn Plc 000	Teme Ltd 000
Assets
Investment in Teme Ltd	700
Property, Plant and Equipment	1,800	1,000
Current assets	760	360
Total assets	3,260	1,360
Equity and Liability
Equity
Share capital	2,000	700
Retained earnings	650	310
Total Equity	2,650	1,010
Non-current liabilities	120	200
Current liabilities	490	150
Total liabilities	610	350
Total equity and liabilities	3,260	1,360

Further information

• Included within the current assets of Severn Plc and in the current liabilities of Teme Ltd is an inter-company transaction for 20,000 that took place in early March 2018.
• Severn Plc has decided non-controlling interest will be valued at their proportionate share of net assets.

b) Required - Prepare consolidated statement of financial position for Severn Plc and its subsidiary as at 31 March 2018.