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Show workings The whole question is posted here what more iinfo is needed ? On 1 June 2020, Persley acquired 65% of Scarlett. The Statements
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The whole question is posted here what more iinfo is needed ?
On 1 June 2020, Persley acquired 65% of Scarlett. The Statements of Profit or Loss of both companies for the year ended 30 September 2020 are as shown below: Persley Scarlett $ 000 $ 000 Revenue 150,000 80,000 Cost of sales (90,000) (50,000) Gross profit 60,000 30,000 Other income 10,000 5,000 Interest 12.000 2,000 82,000 37,000 Expenses: Distribution costs (15,000) (6,000) Administrative expenses (12,000) (8,000) Finance costs (5,000) (3,000) Profit before tax 50,000 20,000 Income tax expense (17,000) (4,000) Profit for the year 33,000 16,000 Revaluation surplus 500 150 Total comprehensive income 33,500 16,150 The following information is relevant: 1. A fair value exercise was carried out at the date of acquisition of Scarlett and it was found that the fair value of Plant (non-current assets) was $ 12 million less than its carrying amount. At the date of acquisition, the lifetime of Plant was 4 years and it is the group policy to account for depreciation on a proportionate basis. Depreciation is normally included in cost of sales and the group accountant has confirmed that no adjustment was made in Scarlett's financial statements with respect to the Plant. 2. The Other income in statement of Persley is a dividend received from Scarlett on 30 September 2020. 3. Persley has lent $ 5 million at an interest of 12% per annum to Scarlett. All interest accruing to 30 September 2020 had been accounted for by both companies. 4. Following an impairment tests carried out on 30 September 2020, it was concluded that goodwill of Scarlett should be written down by $ 1 million. The group's policy is to value the non-controlling interest using the proportionate method. 5. The revaluation surplus for both parent and subsidiary arose after the acquisition. 6. All income and expenses are deemed to accrue evenly throughout the year unless otherwise indicated. REQUIRED Prepare the consolidated Statement of profit or loss for Persley for the year ended 30 September 2020Step by Step Solution
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