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 | 25,200 | 19,200 |
| COST OF SALES | 12,600 | 11,520 |
| GROSS PROFIT | 12,600 | 7,680 |
| OPERATING EXPENSES | 8,820 | 4,608 |
| PROFIT BEFORE TAX | 3,780 | 3,072 |
| TAX | 756 | 614 |
| PROFIT | 3,024 | 2,458 |
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 | 25,200 | 19,200 | (3,000) | 41,400 |
| COST OF SALES | 12,600 | 11,520 | Derived | 21,420 |
| GROSS PROFIT | 12,600 | 7,680 | (300) | 19,980 |
| OPERATING EXPENSES | 8,820 | 4,608 | 13,428 | |
| PROFIT BEFORE TAX | 3,780 | 3,072 | 6,552 | |
| TAX | 756 | 614 | 1,370 | |
| PROFIT | 3,024 | 2,458 | 5,182 |
To do the same topic again in ACCA F3 New Consolidated Account