58 Chapter 10 Paper F7 Preparation of the Consolidated Statement of Profit or Loss and Other Comprehensive Incomeeme2Sbeep0em16ber (Ignore goodwill) Strictly speaking, the Statement of Profit or Loss and Other Comprehensive Income should finish on the line “Profit after tax”, but continue down through non-controlling interest and dividends Inter-entity trading issue when considering the group as if it were a single entity, inter-entity trading represents transactions which the group undertakes with itself. Clearly these have to be eliminated from the results. The value of inventory in the Consolidated Statement of Profit or Loss and Other Comprehensive Income may need to be adjusted to make sure that it represents the cost to the group. Lina $ $ Revenue 40,000 30,000 Cost of sales and expenses 27,000 16,000 Profit from operations 13,000 14,000 Dividend from subsidiary - Profit before tax 16,000 14,000 Taxation 4,800 4,200 Profit after tax 11,200 9,800 Dividends of $6,000 and $5,000 respectively have been proposed. During the year Lina sold $4,000 worth of goods at a mark up of 25% to Sigimantas. Sigimantas had none of these goods in inventory at the year end. Prepare a Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Lina Group for the year ended 31 December, 2009.
58 Chapter 10 Paper F7 Preparation of the Consolidated Statement of Profit or Loss and Other Comprehensive Incomeeme2Sbeep0em16ber (Ignore goodwill) Strictly speaking, the Statement of Profit or Loss and Other Comprehensive Income should finish on the line “Profit after tax”, but continue down through non-controlling interest and dividends Inter-entity trading issue when considering the group as if it were a single entity, inter-entity trading represents transactions which the group undertakes with itself. Clearly these have to be eliminated from the results. The value of inventory in the Consolidated Statement of Profit or Loss and Other Comprehensive Income may need to be adjusted to make sure that it represents the cost to the group. Lina $ $ Revenue 40,000 30,000 Cost of sales and expenses 27,000 16,000 Profit from operations 13,000 14,000 Dividend from subsidiary - Profit before tax 16,000 14,000 Taxation 4,800 4,200 Profit after tax 11,200 9,800 Dividends of $6,000 and $5,000 respectively have been proposed. During the year Lina sold $4,000 worth of goods at a mark up of 25% to Sigimantas. Sigimantas had none of these goods in inventory at the year end. Prepare a Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Lina Group for the year ended 31 December, 2009.
ACCA_F7_S16_Notes.docx