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Red Limited have two subsidiaries, Blue Limited and Violet Limited. The income statements of Red Limited, Blue Limited and Violet Limited for the year ended

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Red Limited have two subsidiaries, Blue Limited and Violet Limited. The income statements of Red Limited, Blue Limited and Violet Limited for the year ended 31 March 2021 were shown as follows: Revenues Cost of sales Gross profit Other income Distribution costs Administrative expenses Finance costs Profit before tax Taxation Profit for the year Red Blue S '000 S '000 10,800 9,600 (7,200 (4,800) 3,600 4,800 1,080 720 (720) (288) (960) (600) (600) (480) 2,400 4,152 (960) (552) 1,440 3,600 Violet S '000 2,880 (1,200 1,680 360 (144) (240) (720) 936 (216) 720 Additional information: 1. Red Limited acquired 85% ordinary shares of Blue Limited (a supplier of Red Limited) on 1 April 2019 when the retained profits of Blue Limited were $530,000. The goodwill arising on acquisition date was $3,200,000. 2. Red Limited also acquired 55% of ordinary shares of Violet Limited (a customer of Red Limited) on 1 November 2018 when the retained loss of Violet Limited was $2,230,000. The goodwill arising on acquisition date was $1,100,000. 3. The goodwill of Blue Limited at 31 March 2021 was $2,400,000. The impairment of goodwill for the year ended 31 March 2020 was $260,000. The non-controlling interest was stated at fair value of the acquisition date. 4. Red Limited purchased goods at a purchase price of $8,000,000 from Blue Limited during the year ended 31 March 2021. At the year-end date, 15% of these goods remained in the storeroom of Red Limited. The beginning inventories held at books of Red Limited at 1 April 2020 were amounted to $130,000 representing goods purchased from Blue Limited during the year ended 31 March 2020. All the sales made by Blue Limited to Red Limited were at a mark-up of 25% on the purchase cost of Blue Limited from external suppliers. All the sales made by Red limited to external customers were at a mark-up of 35% on purchase cost of Red Limited from Blue Limited. 5. Red Limited sold goods amounting to $950,000 to Violet Limited at a profit of $56,000 during the year ended 31 March 2021. All these goods were then sold to external customers by Violet Limited before 31 March 2021 at a profit margin of 10%. There were no beginning inventories in Violet Limited. 6. There is a loan from Red Limited to Violet Limited since 2019 January. During the year ended 31 March 2021, Violet Limited incurred interest of $250,000 to Red Limited for the finance costs of the loan. Red Limited recorded the interest income as other income. 7. There was no impairment for goodwill of Violet Limited since acquisition. 8. Blue Limited and Violet Limited did not issue preference shares. Required: Prepare the consolidated income statement for Red Limited and its subsidiaries for the year ended 31 March 2021

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