The statements of comprehensive income for Highway plc, Road Ltd and Lane Ltd for the year ended 31 December 20X9 were as follows:
|
Highway plc |
Road Ltd |
Lane Ltd |
|
|
$ |
$ |
$ |
|
|
Revenue |
184,000 |
152,000 |
80,000 |
|
Cost of sales |
(48,000) |
(24,000) |
(16,000) |
|
Gross profit |
136,000 |
128,000 |
64,000 |
|
Administration costs |
(13,680) |
(11,200) |
(20,800) |
|
Distribution costs |
(11,200) |
(17,600) |
(8,000) |
|
Dividends receivable from Road |
2,480 |
||
|
Profit before tax |
113,600 |
99,200 |
35,200 |
|
Income tax |
(32,000) |
(8,000) |
(4,800) |
|
Profit for the period |
81,600 |
91,200 |
30,400 |
Highway plc acquired 80% of Road Ltd for $160,000 on 1.1.20X6 when Road Ltd”s share capital was $64,000 and reserves were $16,000. Highway plc acquired 30% of Lane Ltd for $40,000 on 1.1.20X7 when Lane Ltd”s share capital was $8,000 and reserves were $8,000.
Goodwill of Road Ltd had suffered impairment charges of $14,400 in previous years and $4,800 was to be charged in the current year. Goodwill of Lane Ltd had suffered impairment charges of $3,520 in previous years and $1,760 was to be charged in the current year.
During the year Road Ltd sold goods to Highway plc for $8,000. These goods had cost Road Ltd $1,600. 50% were still in Highway”s inventor y at the year end.
During the year Lane Ltd sold goods to Highway plc for $6,400. These goods had cost Lane Ltd $3,200. 50% were still in Highway”s inventor y at the year end.
Highway”s revenue included management fees of 5% of Road and Lane”s turnover. Both of those companies have treated the charge as an administration cost. Non-controlling interests are measured using method 1.
Required:
Prepare Highway”s consolidated statement of comprehensive income for the year ended 31.12.20X9.