PLANK CO

PLANK CO
Plank Co has owned 35% of Arch Co since 1 June 20X7 and it acquired 85% of Strip Co on
1 April 20X8. The statements of profit or loss and other comprehensive income for the year
ended 31 December 20X8 are:
Plank Co Strip Co Arch Co
$000 $000 $000
Revenue 705,000 218,000 256,000
Cost of sales (320,000) (81,000) (83,500)
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Gross profit 385,000 137,000 172,500
Distribution costs (58,000) (16,000) (18,500)
Administrative expenses (92,000) (28,000) (29,000)
Investment income 46,000 2,000 ?
Finance costs (12,000) (14,000) (11,000)
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Profit before tax 269,000 81,000 114,000
Income tax expense (51,500) (15,000) (21,430)
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Profit for the year 217,500 66,000 92,570
Other comprehensive income
Gain on revaluation of land 2,800 3,000 ?
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Total comprehensive income for the year 220,300 69,000 92,570

ANS
Income from associate $000
Share of profit after tax (92,570 × 35%) 32,400

Good day, I don’t understand why the profit of the associate was not time apportioned.I’ll appreciate an explanation why.