The condensed Statement of Financial Position and Income Statements of Love Co. Ltd and its overseas (foreign subsidiary Stress Co. Ltd. are shown below:

The following additional information is given:

a) Depreciation is charged at a rate of 5% per annum

b) There were no loan repayments or movements in non-current assets during the year ended December 31, 2017. The opening inventory for Stress Co. was 100. Assume that inventory turnover times are very short.

c) Love Co. has had its interest in Stress Co. since the incorporation of the company.

d) The following exchange rates are applicable:

6 = $1 when Stress Co. was Incorporated

4 = $1 when Stress Co. acquired its non-current assets

3.5 = $1 on December 31, 2016

2.5 = $1 average rate of exchange for the year ended December 31, 2014

1 = $1 on December 31, 2017

Required:

Prepare the summarized consolidated financial statements of the Love Co. group for the year ended December 31, 2017.

(Note: show all workings)

STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2017 Love Co. Ltd Stress Co. Ltd. Assets: Non Current Assets: Equipment at Cost Less: accumulated depreciation Investment in Scoochie's 100 share 1 each 800 (350) 500 (200) 450 300 200 650 300 Current assets: Inventories Accounts receivables Total Assets 800 1000 1.800 500 350 850 Equity and Liabilities Equity Ordinary Shares $1/1 Retained earnings 1000 850 500 350 1,850 850 Long-term loans Current Liabilities 200 400 200 100 Condensed income statement of Love Co. and its overseas subsidiary Stress Co. for the year ended December 2017 Profit before Tax Tax Profit after Tax retained $800 (450) $350 300 (175) 125 STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2017 Love Co. Ltd Stress Co. Ltd. Assets: Non Current Assets: Equipment at Cost Less: accumulated depreciation Investment in Scoochie's 100 share 1 each 800 (350) 500 (200) 450 300 200 650 300 Current assets: Inventories Accounts receivables Total Assets 800 1000 1.800 500 350 850 Equity and Liabilities Equity Ordinary Shares $1/1 Retained earnings 1000 850 500 350 1,850 850 Long-term loans Current Liabilities 200 400 200 100 Condensed income statement of Love Co. and its overseas subsidiary Stress Co. for the year ended December 2017 Profit before Tax Tax Profit after Tax retained $800 (450) $350 300 (175) 125