Association – exam like Question with Answer

Summarised Financial Statements for the year to 31 December 2011
Statements of Financial Position
Tom
Dick
Harry
$m
$m
$m
Non Current Assets
Tangibles
50
40
44
Investment (NOTE 1)
56
Current Assets
Inventory
22
18
14
Receivables
10
26
22
Bank
14
18
24
152
102
104
Share Capital ($1)
60
20
50
Reserves
42
26
34
Current liabilities
50
56
20
152
102
104
Income Statements
Tom
Dick
Harry
$m
$m
$m
Revenue
266
320
250
Cost of Sales
(162)
(184)
(132)
Gross Profit
104
136
118
Operating Expenses
(70)
(72)
(51)
Operating Profit
34
64
58
Investment Income
24
–
–
Profit Before Tax
58
64
58
Taxation
(26)
(34)
(34)
Profit After Tax
32
30
24

1) Tom purchased 80% of Dick for $30m on 1 January 2011. Goodwill has been impaired during the year by $1,000,000. Reserves at acquisition were $6m.
2) Tom also purchased 30% of Harry for $26m two years ago when reserves were $5m. Goodwill was impaired by $500,000 of which $150,000 relates to this year. The other 70% of Harry?s shares are owned by a number of small investors who hold no more than 2% each.
3) During the year Dick sold goods to Tom to the value of $8m at a mark-up of 25% on cost. All of the goods sold to Tom were still in inventory at the year end. There was an outstanding balance between the two companies at the end of the year of $3m as a result of this transaction.
4) The fair value of the non-controlling interest at acquisition was $7.5m
5) The investment income of Tom was received from Dick.
Required:
Prepare both the Consolidated Statement of Financial Position and Income Statement for the year to 31 December 2011.
Answer can be found here.
ANSWER