Consolidated Statement

Pokua Co has owned 35% of Abena Co since 1 June 20X7. The later acquired 85% of Opoku Co on 1 April 20X8. Abena Co had previously (i.e 1 July, 20X6) acquired 80% of Akosua. The statements of profit or loss and other comprehensive income for the year ended 31 December 20X8 are:
Pokua Co
Opoku Co
Akosua Co
Abena Co
GHS 000
GHS 000
GHS 000
GHS 000
Revenue
705,000
218,000
218,000
256,000
Cost of sales
(320,000)
(81,000)
(81,000)
(83,500)
Gross Profit
385,000
137,000
137,000
172,500
Distribution cost
(58,000)
(16,000)
(16,000)
(18,500)
Administrative expenses
(92,000)
(28,000)
(28,000)
(29,000)
Investment income
46,000
2,000
2,000
Finance cost
(12,000)
(14,000)
(14,000)
(11,000)
Profit before tax
269,000
81,000
81,000
114,000
Income tax expenses
(51,500)
(15,000)
(15,000)
(21,430)
Profit for the year
217,500
66,000
66,000
92,570
Other comprehensive income
Gain on revaluation of land
2,000
3,000
3,000
2,000
Total comprehensive income for the year
220,300
69,000
69,000
94,570
The following information is relevant:
a.
a fair value exercise conducted on 1 April 20X8 concluded that the carrying amount of Opoku Co’s net assets were equal to their fair values with the exception of an item of machinery which had a fair value of GHS 8 million in excess of its carrying amount. At 1 April 20X8 the machinery had a remaining life of three years. Depreciation is charged to cost of sales.
b.
Since acquisition, Pokua Co has sold goods to Opoku Co and Akosua Co totalling GHS 39 million and 29 million respectively. Opoku Co. and Akosua Co. had one quarter of these goods in inventory at 31 December 20X8. During the year, Pokua Co
also sold goods to Abena Co held in inventory at 31 December 20X8. All of these goods had a mark-up on cost of 30%.
c.
The investment income of Pokua Co for the year ended 31 December 20X8 includes dividends from Opoku Co and Abena Co (see note D). It also includes GHS 5 million interest receivable on a loan made to Opoku Co on 1 April 20X8
d.
Opoku Co paid a dividend to shareholders of GHS 18 million on 31 December 20X8. Abena Co paid a dividend on 31 December 20X8 of GHS 35 million.
e.
In Pokua Co’s consolidated statement of financial position at 31 December 20X7, the carrying amount of Pokua Co’s investment in Abena Co was GHS 145,000. This was calculated using the equity accounting.
f.
All other comprehensive income occurred after 1 April 20X8. Unless otherwise included all other items in the above statements of profit or loss and other comprehensive income are deemed to accrue evenly over the year.
Required
a) Prepare the consolidated statement of profit or loss and other comprehensive income of Pokua Co for the year ended 31 December 20X8
b) Calculate the carrying amount of the investment in Abena Co in the consolidated statement of Pokua Co. as at 31 December 20X8
Note: Show all workings for 10 marks