The following are the financial statements of the parent company Swish plc, a subsidiary company Broom and an associate company Handle.
Statements of financial position as at 31 December 20X3
| Swish | Broom | Handle | |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment at cost | 320,000 | 180,000 | 100,000 |
| Depreciation | 200,000 | 70,000 | 21,000 |
| 120,000 | 110,000 | 79,000 | |
| Investment in Broom | 140,000 | ||
| Investment in Handle | 40,000 | ||
| Current assets | |||
| Inventories | 120,000 | 60,000 | 36,000 |
| Trade receivables | 130,000 | 70,000 | 36,000 |
| Current account – Broom | 15,000 | ||
| Current account – Handle | 3,000 | ||
| Bank | 24,000 | 7,000 | 6,000 |
| Total current assets | 292,000 | 137,000 | 78,000 |
| Total assets | 592,000 | 247,000 | 157,000 |
| EQUITY AND LIABILITIES | |||
| £1 ordinary shares | 250,000 | 60,000 | 50,000 |
| General reserve | 30,000 | 20,000 | 12,000 |
| Retained earnings | 150,000 | 120,000 | 50,000 |
| 430,000 | 200,000 | 112,000 |
| Current liabilities | |||
| Trade payables | 132,000 | 25,000 | 34,000 |
| Taxation payable | 30,000 | 7,000 | 8,000 |
| Current account – Swish | 15,000 | 3,000 | |
| Total equity and liabilities | 592,000 | 247,000 | 157,000 |
Statement of comprehensive income for the year ended 31 December 20X3
| £ | £ | £ | |
| Sales | 300,000 | 160,000 | 100,000 |
| Cost of sales | 90,000 | 80,000 | 40,000 |
| Gross profit | 210,000 | 80,000 | 60,000 |
| Expenses | 95,000 | 50,000 | 40,000 |
| Dividends paid (shown in equity) | 40,000 | 10,000 | 8,000 |
| Dividends received from Broom and Handle | 11,000 | NIL | 10,000 |
| Profit before tax | 126,000 | 30,000 | 30,000 |
| Income tax expense | 30,000 | 7,000 | 8,000 |
| Profit for the period | 96,000 | 23,000 | 22,000 |
| Dividend paid (shown in equity) | 40,000 | 10,000 | 8,000 |
Swish acquired 90% of the shares in Broom on 1 January 20X1 when the balance on the retained earnings of Broom was £60,000 and the balance on the general reserve of Broom was £16,000. Swish also acquired 25% of the shares in Handle on 1 January 20X2 when the balance on Handle’s accumulated retained profits was £30,000 and the general reserve £8,000.
During the year Swish sold Broom goods for £16,000, which included a mark-up of one-third. 80% of these goods were still in inventor y at the end of the year. Non-controlling interests are measured using method 1.
Required:
(a) Prepare a consolidated statement of comprehensive income, including the associated company Handle’s results, for the year ended 31 December 20X3.
(b) Prepare a consolidated statement of financial position as at 31 December 20X3. The group policy is to measure non-controlling interests using method 1.
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