QUESTION ONE On 1 July 2018 Crystal acquired 60,000 of the 100,000 shares in Pebble, its only subsidiary. The draft statements of profit or loss and other comprehensive income of both companies at 31 December 2018 are shown below: Crystal Pebble K'000 K'000 Revenue 43,000 26,000 Cost of sales (28,000) (18.000) Gross profit 15,000 8,000 Other income - dividend received from Pebble 2,000 Distribution costs (2.000) (800) Administrative expenses (4,000) (2,200) Finance costs (500) (300) Profit before tax 10,500 4,700 Income tax expense (1.400) (900) Profit for the year 9,100 3,800 Other comprehensive income: Gain on property revaluation (Note (1)) 2,000 Investment in equity instrument 200 Total comprehensive income for the year 9.300 5.800 Additional information: (1) At the date of acquisition the fair values of Pebble's assets were equal to their carrying amounts with the exception of a building which had a fair value Klm in excess of its carrying amount. At the date of acquisition the building had a remaining useful life of 20 years. Building depreciation is charged to administrative expenses. The building was revalued again at 31 December 2018 and its fair value had increased by an additional Kim. (i) Sales from Crystal to Pebble were kom during the post-acquisition period. All of these goods are still held in inventory by Pebble. Crystal marks up all sales by 20%. (iii) Despite the property revaluation, Crystal has concluded that goodwill in Pebble has been impaired by K 500,000. (iv) It is Crystal's policy to value the non-controlling interest at full (fair) value. (v) Income and expenses can be assumed to have arisen evenly throughout the year. Required: Prepare the consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2018. (25 Marks)