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QUESTION 1 (January 2020) (a) You have been provided with the statements of prot or loss and other comprehensive income of Back plc and Stop Limited for the year ended 31 December 2019. Statements of Prot or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 Back plc Stop Limited '000 '000 Revenue 28,900 9,100 Cost of sales Mm (5m Gross prot 14,100 4,980 Administration costs (6,300) (1 ,450) Selling and distribution costs (4,980) (1,890) Finance cost 1%) 1m) Prot before tax 2,380 1.490 Income tax expense (m) (m) Prot for the year 1m 1M 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 fth 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 prot 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 nancial 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 FWOOO Assets Non-current assets Property. plant and equipment 740 815 Investment in Union Limited at cost _- E M Current assets Inventory 85 60 Receivables 215 80 Cash in hand and at bank i E M 160 1m 97: Equity and Liabilities Equity Called up slim capital 300 500 Retained earnings g E 915 855 Current liabilities M w LE E 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$100,000 on 1 January 2010. For the purposes of measuring non- controlling interests at the date of acquisition, the proportionate share method equated to the fair value method. Goodwill was impaired for the rst time by 5,000 during the year ended 31 December 2019. 2. The nancial statements for the year ended 31 December 2019 included the following: Customs plc Union Limited '000 E$'000 Operating prot 370 297 Dividend received from Union Limited 9 , Taxation charge (160) (77) Dividend pztd _- 1&1 N 0 mm retained for the nancial year 1 M No other dividends were paid or proposed by either company. 3. The following exchange rates have been ascertained: lJanuaryZOlO E$10=1 31 December 2018 E56 = 1 31 December 2019 E15 = 1 Average rate for the year ended 31 December 2019 1555.5 = 1 Requirement Prepare the consolidated statement of nancial position of Customs Group as at 31 December 2019, showing any foreign exchange gains and losses arising. g Marks Total 5 Marks