Keswick Co acquired 80% of the share capital of Derwent Co on 1 June 20X5. The summarised draft statements of profit or loss for Keswick Co and Derwent Co for the year ended 31 May 20X6 are shown below:
| KESWICK | DERWENT | |
| REVENUE | 37,800 | 7,200 |
| COST OF SALES | 18,900 | 4,320 |
| GROSS PROFIT | 18,900 | 2,880 |
| OPERATING EXPENSES | 13,230 | 1,728 |
| PROFIT BEFORE TAX | 5,670 | 1,152 |
| TAX | 1,134 | 230 |
| PROFIT | 4,536 | 922 |
During the year Keswick Co sold goods costing $2,000 to Derwent Co for $3,000. At 31 May 20X6, 30% of these goods remained in Derwent Co’s inventory.
Required:
(a) Prepare the Keswick group consolidated statement of profit or loss for the year ended 31 May 20X6.
Note: The statement should stop once the consolidated profit for the year has been determined. The amounts attributable to the non-controlling interest and equity owners of Keswick are not required. Show all workings as credit will be awarded to these as appropriate. (7 marks)
SUGGESTED SOLUTIONS
| KESWICK | DERWENT | ADJUSTMENT | CONSOLIDATED | |
| REVENUE | 37,800 | 7,200 | (3,000) | 42,000 |
| COST OF SALES | 18,900 | 4,320 | Derived | 20,520 |
| GROSS PROFIT | 18,900 | 2,880 | (300) | 21,480 |
| OPERATING EXPENSES | 13,230 | 1,728 | 14,958 | |
| PROFIT BEFORE TAX | 5,670 | 1,152 | 6,522 | |
| TAX | 1,134 | 230 | 1,364 | |
| PROFIT | 4,536 | 922 | 5,158 |
To do the same topic again in ACCA F3 New Consolidated Account