QUESTION 3 [30 MARKS]
On 01 July 2023, Petunia Ltd purchased 75% of Spider Ltd. The Income statements for the year ended 31 December 2023 of the two entities are as follows:
Income statements for the year ended 31 December 2023
Petunia Ltd Spider Ltd
$ 000 $ 000
Revenue 20,000 21,000
Cost of sales (9,020) (7,700)
Gross profit 10,980 13,300
Dividend income from Spider Ltd 79 -
Distribution costs (308) (165)
Administrative expenses (396) (220)
Profit before tax 10,355 12,915
Income tax expense (1,488) (1,054)
Profit for the year 8,867 11,861
The following information is relevant:
1. The consolidated goodwill was impaired by $ 2 million on 31 December 2023. The group's policy is to value the non-controlling interest using the proportionate method.
2. On 30 December 2023, Spider Ltd paid dividend to Petunia Ltd amounting to $ 79,000.
3. All income and expenses are deemed to accrue evenly throughout the year unless otherwise indicated.
REQUIRED
Prepare the consolidated Income statement for the year ended 31 December 2023.
