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    FR Assignment 2

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    shashalalaxiang
    The consolidated income statement for Animal Ltd for the year ended 31 December 2017 shows total sales of £12,000,000 with cost of sales of £4,700,000 for a gross profit of £7,300,000. Operating costs include administration, distribution, and a management fee from associates. After accounting for investment income, interest, share of associate profit, and goodwill impairment, profit before tax was £4,800,000. Tax was £500,000 resulting in profit after tax of £4,300,000. After accounting for non-controlling interest and dividends paid, profit for the year was £3,300,000 with retained profit carried forward of £8,340,000.

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    FR Assignment 2

    Uploaded by

    shashalalaxiang
    14 views2 pages
    The consolidated income statement for Animal Ltd for the year ended 31 December 2017 shows total sales of £12,000,000 with cost of sales of £4,700,000 for a gross profit of £7,300,000. Operating costs include administration, distribution, and a management fee from associates. After accounting for investment income, interest, share of associate profit, and goodwill impairment, profit before tax was £4,800,000. Tax was £500,000 resulting in profit after tax of £4,300,000. After accounting for non-controlling interest and dividends paid, profit for the year was £3,300,000 with retained profit carried forward of £8,340,000.

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    The consolidated income statement for Animal Ltd for the year ended 31 December 2017 shows total sales of £12,000,000 with cost of sales of £4,700,000 for a gross profit of £7,300,000. Operating costs include administration, distribution, and a management fee from associates. After accounting for investment income, interest, share of associate profit, and goodwill impairment, profit before tax was £4,800,000. Tax was £500,000 resulting in profit after tax of £4,300,000. After accounting for non-controlling interest and dividends paid, profit for the year was £3,300,000 with retained profit carried forward of £8,340,000.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    14 views2 pages

    FR Assignment 2

    Uploaded by

    shashalalaxiang
    The consolidated income statement for Animal Ltd for the year ended 31 December 2017 shows total sales of £12,000,000 with cost of sales of £4,700,000 for a gross profit of £7,300,000. Operating costs include administration, distribution, and a management fee from associates. After accounting for investment income, interest, share of associate profit, and goodwill impairment, profit before tax was £4,800,000. Tax was £500,000 resulting in profit after tax of £4,300,000. After accounting for non-controlling interest and dividends paid, profit for the year was £3,300,000 with retained profit carried forward of £8,340,000.

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    AC AC2091 Financial Reporting Assignment 2

    The income statements for Animal Ltd, Lion Ltd and Tiger Ltd for the year ended 31 December 2017
    are given as follows:

    Animal Ltd Lion Ltd Tiger Ltd


    £'000 £'000 £'000
    Sales 7,000 3,500 2,500
    Cost of sales -2,700 -1,200 -1,000
    Gross profit 4,300 2,300 1,500
    Dividends Income 150 - -
    Administration costs -420 -310 -150
    Distribution costs -210 -430 -80
    Operating profit 3,820 1,560 1,270
    Interest receivable 110 - -
    Interest payable -30 -50 -
    Profit before tax 3,900 1,510 1,270
    Tax -250 -150 -50
    Profit after tax 3,650 1,360 1,220
    Dividends Paid -400 -100 -130
    Profit for the year 3,250 1,260 1,090
    Retained profit brought forward 2,700 1,180 900
    Retained profit carried forward 5,950 2,440 1,990

    Animal Ltd acquired 60 % of Lion Ltd on 1 January 2008 for £400,000 when Lion’s Share Capital and
    Reserves were £240,000. The share capital of Lion Ltd totals £80,000

    Interest payable by Lion Ltd is in respect of a Loan Stock issue of which 80% was acquired by Animal
    Ltd.

    Animal Ltd acquired 30% of Tiger Ltd for £400,000 when Tiger Ltd’s share capital and reserves were
    £150,000 on 1 January 2010. The share capital of Tiger Ltd is 60,000 50p shares.

    During the year Lion Ltd sold goods costing £10,000 to Animal Ltd for £30,000. 20% of this inventory
    is included in Animal Ltd’s inventory at the year-end.

    During the year Tiger Ltd sold goods costing £10,000 to Animal Ltd for £16,000. 50% of this inventory
    is still in Animal Ltd’s inventory at the year-end.

    Impairment of 50% of the value of the goodwill of Lion Ltd was seen in 2015 and impairment of 20% of
    the value of the goodwill in Tiger Ltd is seen in 2017.

    At the year-end Animal Ltd charges both Lion Ltd and Tiger Ltd a management fee of 5% of turnover.
    None of the companies has accounted for this management fee.

    Required:

    Prepare the consolidated income statement for Animal Ltd for the year ended 31 December 2017. (20
    marks)

    1
    STUDENT FULL NAME: _____________________________CLASS: ___________

    ATTENTION
    1. Structure: P___________ S_____________ A_____________
    2. Pre and Post net assets considered
    3. Goodwill for both S and A
    4. (i) Adjust numbers (ii) contra/eliminate interco (iii) aggregate all Income and Expenses of S
    5. Associate profit is one-line share of profit before tax and the tax of Assoc post acquisition.
    6. NCI is share of S profits after tax after all adjustments to S
    7. Retained profit B/F from S and A include only post acquisition after adjustment

    Animal Group. Consolidated income statement for the year ended 31 December 2017

    £'000
    Sales
    Cost of sales
    Gross profit

    Administration costs
    Distribution costs
    Operating profit
    Management Fee from Associate
    Investment Income
    Interest receivable
    Interest payable
    Share of Associate profit
    Goodwill Impairment
    Profit before tax
    Tax
    Profit after tax
    Non-Controlling Interest
    Dividends Paid
    Profit for the year
    Retained profit brought forward
    Retained profit carried forward

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