Page 295 - SBR Integrated Workbook STUDENT S18-J19

Change in a group structure

Example 3 – continued

(i) On 1 October 20X1 Coaster sold its shareholding in Cakewalk for $79
million. The shares were originally purchased for $50 million and were
carried at cost in Coaster’s individual financial statements. Coaster has
recorded a profit on disposal in investment income in its individual
financial statements.

Goodwill and the non-controlling interest at the disposal date were
carried at $6 million and $14 million respectively in the consolidated
financial statements. Cakewalk’s statement of changes in equity shows
that it had share capital and retained earnings of $1 million and $37
million at 1 January 20X1.

The sale of Cakewalk should be presented as a discontinued operation.

(ii) Coaster sold goods to Waltzer during the year for $30 million. None of
these goods remained in group inventory at the reporting date.

(iii) On 1 March 20X1, Coaster purchased a 40% shareholding in Bumper. In
the year ended 31 December 20X1, Bumper made a profit after tax of
$36 million.

Prepare the consolidated statement of profit or loss for the Coaster
group for the year ended 31 December 20X1.

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