APPROVED SECTION B - ANSWER TWO OUT OF THREE QUESTIONS Question Two ‘The summarise Statement of Comprehensive Income of Gloucester pl, Hull Ltd end Ipswich Lid forthe year ended 31* December 2009 are as follows: jj a Giowesster ple HraitLed | tpewien Lid £000 000 ‘2000 Sales 16,500 5,700 11,000 (Cost of Sales 8.350 2950 930 Gros Profit, 8150 2750 5070 Expenses 3400 490 2.430 “Trading Prot 3.180 1260 2,640, Investment Income ‘a0 — Pri before Tax 4.160 2.640 Taxation ‘50 430 Profit ater Tax 3,500 2210 Dividends: on ordinary shares 1300 250 650 “on Preference shares top |_ Profit retained for the year 210 670 1360 Reta Profit bt La30 340 1610 Retained ProitefT 360 50 20 Hurther information 1. Glogcester aquired 70% of he ordinary shires of Hull several years ago when the retained profit eserves of Hall wee £270,000. Gloucester also acquired 47% ofthe. ference shares of Hull onthe same date 2, Gloucester sold goods fr resale to Hull during the year for £50,000 the invoice price). The goods were invoioed a cos 125% Of these goods, 50% was ill in Hut’ stock athe end ofthe year. 3. Gloucester acquired 30% ofthe oulingry shes of Ipswich on the 1" January 2009 Ipswich does not have ay preference shares. 44 Gloucester purchases gods for resale from Ipswich and at 31* December 2009 bel Sook of have goods amounting to £160,000. pwwich manufactures onl one product tnd has «standard selling pie ie standard rons profit %) to all its cusoeners. 5, Gloucester, Hull ad Ip have each filly accourted for the dividends payable for the year ended 31" December 2009, Gloucester has ill counted forthe dividends tocetvable from Hull and psvch forthe yea (under “investment income”). 6. Goodwill acquisition is capitalised on the Consolidated Statement of Financial postion and reviewed anally for impairment. Th previous years, ard this year, there Fas been go goodwill impirment for eter Hullo Ipswich Required: Gy Prepare the Consolidated Statement of Comprehensive Income of the Gloucester ple Group forthe year ended 31” December 2009.” (20 marks) (©) Explain why i€ is nosessry, to eliminate iate-company transactions in the preparation ofthe consolidated Statreat of comprchensive income, (10 marta) (otal 30 marks) Page 4APPROVED SECTION B- ANSWER TWO OUT OF THREE QUESTIONS Question Two ‘The summarised Statement of Comprehensive Income of Greenwich pl, Hyde Li and liner Li fer th yar ended 31st Desoribe 2010 ares follows: fl 3 A Ccreenwich plo Hyde Ltd | nor Lid £000, £000 2000 Sales 20,500 5900 | 12,500 Cost of Sales 11400 3.200 6350 Gross Profit 270} 5.650 Expenses _ igo |__ 2.840 “Trang Profit Toto 2810 Investment Income - - Profit before Tox Toto “Taxation 210 Profit ater Tax #00 Dividends: on onary shares 1300 280 “on Preference shares 150, 90 - Profi eained for the year 96240 PSO Retained Profit bit 1680 so0__| 1380 Rewined Profit elf Bi 7230 2700 ‘Eurtr information TT Grerwich aquied 70% of headin share of Hyd several year ago whe the ‘tained profit sens of Hse ware. £250,009, Greenwich also squire 4 the puna shares Ee onthe sedate. = anne 2. Greenwich sold gods fo resale to Hyde ding the year for £760,000 (the invoioe price). The goods were invoiced a cost #259, OF these goods, 60% was sill in He's stock atthe end f the year. |. Greenwich acquired 20% ofthe ordinary shares of ier on the Ist January 2010 ner does nat have any preference shares. 4, Greenwich purchases goods for real from liner and at 31st December 2010 held a ook of those goods amounting to £160,000 mr basa standard eling rice Cie > andar rose profit 9) tal eaters ‘Greenwich, Hyde and liner have cach fll accounte for the dividends payable or the year ended 31st December 2010, Grcnich has filly accounted forthe dividends ‘receivable from Hyde but not asounted forthe dividends from Tina forthe year (onder “investment income”) 6. Goodwill on acquisition i capitalized onthe Consolidated Statement of Paancal position and reviewed annually fe impairment. In previous years, and this eat, there yas been NO goodwill impairment fr Hye nr liner Lt Required (Prepare the Consolidated Statement of Comprehensive Income of the Greenwich pl Group forthe year ended 31st December 2010.” (20 marks) (6) Additionally, prepare ledger aceounteto show the: {@) Consolidated Retained Profit BF a the start of the year. (4 marks) (Consolidated Retained Profit CIF al the end of the year. (6 marks) (Total 30 marks) SEE eden Atng