QUESTION 1
Below are the statements of comprehensive income of Tyco, its subsidiary Dunkin and
associate Clyde for the year ended 31 December 2021. Tyco, Dunkin and Clyde are public
limited companies.
Tyco Dunkin Clyde
$'000 $'000 $'000
Revenue 1,200 700 300
Cost of sales (500) (350) (80)
Gross profit 700 350 220
Other expenses (300) (100) (60)
Finance income 50 30 –
Finance costs (40) (20) (20)
Profit before tax 410 260 140
Income tax expense (100) (80) (30)
Profit for the year 310 180 110
You are also given the following information:
i) Tyco acquired 185,000 ordinary shares of Dunkin 3 years ago. Dunkin has a total of
250,000 ordinary shares in issue and fully paid.
ii) Tyco acquired 30,000 ordinary shares of Clyde 2 years ago. Clyde has a total of
120,000 ordinary shares in issue and fully paid. Tyco exercise significant influence
over Clyde.
iii) During the year Dunkin sold some goods to Tyco for $75,000. Dunkin sells to Tyco at
cost plus 20%. None of the goods had been sold by the year-end 31 December 2021.
iv) Group policy is to measure non-controlling interests at acquisition at fair value. A
goodwill impairment test carried out at the year-end 2021 resulted in $20,000 of the
recognised goodwill relating to Dunkin being impaired. Assume goodwill impairment
is included in ‘Other expenses’ in the consolidated financial statements.
v) On 1st March 2021, Dunkin acquired a machine (non-current asset) from Tyco for
$ 50,000. Tyco had manufactured the machine for $ 30,000 and treats it as its
inventory. A full year's depreciation is provided for by Dunkin in the year of purchase.
Depreciation rate is 20% based on the straight-line method. Assume depreciation
expense in included in ‘Other expenses’ in the consolidated financial statements.
Required:
Prepare the consolidated statement of comprehensive income for the year ended 31 December
2021 for Tyco, incorporating its subsidiary and associate
Below are the statements of comprehensive income of Tyco, its subsidiary Dunkin and
associate Clyde for the year ended 31 December 2021. Tyco, Dunkin and Clyde are public
limited companies.
Tyco Dunkin Clyde
$'000 $'000 $'000
Revenue 1,200 700 300
Cost of sales (500) (350) (80)
Gross profit 700 350 220
Other expenses (300) (100) (60)
Finance income 50 30 –
Finance costs (40) (20) (20)
Profit before tax 410 260 140
Income tax expense (100) (80) (30)
Profit for the year 310 180 110
You are also given the following information:
i) Tyco acquired 185,000 ordinary shares of Dunkin 3 years ago. Dunkin has a total of
250,000 ordinary shares in issue and fully paid.
ii) Tyco acquired 30,000 ordinary shares of Clyde 2 years ago. Clyde has a total of
120,000 ordinary shares in issue and fully paid. Tyco exercise significant influence
over Clyde.
iii) During the year Dunkin sold some goods to Tyco for $75,000. Dunkin sells to Tyco at
cost plus 20%. None of the goods had been sold by the year-end 31 December 2021.
iv) Group policy is to measure non-controlling interests at acquisition at fair value. A
goodwill impairment test carried out at the year-end 2021 resulted in $20,000 of the
recognised goodwill relating to Dunkin being impaired. Assume goodwill impairment
is included in ‘Other expenses’ in the consolidated financial statements.
v) On 1st March 2021, Dunkin acquired a machine (non-current asset) from Tyco for
$ 50,000. Tyco had manufactured the machine for $ 30,000 and treats it as its
inventory. A full year's depreciation is provided for by Dunkin in the year of purchase.
Depreciation rate is 20% based on the straight-line method. Assume depreciation
expense in included in ‘Other expenses’ in the consolidated financial statements.
Required:
Prepare the consolidated statement of comprehensive income for the year ended 31 December
2021 for Tyco, incorporating its subsidiary and associate
