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 | 29,400 | 12,000 |
| COST OF SALES | 14,700 | 7,200 |
| GROSS PROFIT | 14,700 | 4,800 |
| OPERATING EXPENSES | 10,290 | 2,880 |
| PROFIT BEFORE TAX | 4,410 | 1,920 |
| TAX | 882 | 384 |
| PROFIT | 3,528 | 1,536 |
During the year Keswick Co sold goods costing $4,000 to Derwent Co for $6,000. 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 | 29,400 | 12,000 | (6,000) | 35,400 |
| COST OF SALES | 14,700 | 7,200 | Derived | 16,500 |
| GROSS PROFIT | 14,700 | 4,800 | (600) | 18,900 |
| OPERATING EXPENSES | 10,290 | 2,880 | 13,170 | |
| PROFIT BEFORE TAX | 4,410 | 1,920 | 5,730 | |
| TAX | 882 | 384 | 1,266 | |
| PROFIT | 3,528 | 1,536 | 4,464 |
To do the same topic again in ACCA F3 New Consolidated Account