The statements of financial position of Red Ltd and Pink Ltd at 31 December 20X2 are as follows: Statements of comprehensive income for the year

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The statements of financial position of Red Ltd and Pink Ltd at 31 December 20X2 are as follows:

Statements of comprehensive income for the year ended 31 December 20X2

Red Ltd acquired 75% of the shares in Pink Ltd on 1 January 20X0 when Pink Ltd’s retained earnings were $30,000 and the balance on Pink’s general reserve was $8,000. The fair value of the non-controlling interest at the date was £32,000. Non-controlling interests are to be measured using method 2.

On 31 December 20X2 Red revalued its non-current assets. The revaluation surplus of £25,000 was credited to the revaluation reserve.

During the year Pink sold Red goods for $9,000 plus a mark-up of one-third. Half of these goods were still in inventor y at the end of the year. Goodwill suffered an impairment loss of 20%.

Required:

Prepare a consolidated statement of comprehensive income for the year ended 31/12/20X2 and a statement of financial position as at thatdate.

Red Pink ASSETS Non-current assets 225,000 100,000 Depreciation 80,000 30,000 145,000 70,000 Investment in Pink Ltd T 10,000 Current assets Inventories 100,000 30,000 Trade receivables 80,000 40,000 10,000 Current account Pink Ltd Bank 16,000 8,000 206,000 78,000 Total assets 461,000 148,000 EQUITY AND LIABILITIES Capital and reserves $I common shares 176,000 40,000 General reserve 20,000 14,000 Revaluation reserve 25,000 Retained earnings 100,000 321,000 60,000 114,000 Current liabilities Trade payables Taxation payable 125,996 18,000 14,004 6,000 Current account Red Ltd 10,000 140,000 34,000 461,000 Total equity and liabilities 148,000