1 Groups and consolidation: an overview

Note
. 
 
Retained earnings brought forward 
460 
106 
Retained earnings carried forward 
760 
146 
Additional information 
(a) 
The issued share capital of the group was as follows. 
Wheeler Co: 5,000,000 ordinary shares of $1 each 
Brookes Co: 1,000,000 ordinary shares of $1 each 
(b) 
Wheeler Co purchased 80% of the issued share capital of Brookes Co in 20X0. At that time, the 
retained earnings of Brookes amounted to $56,000. 
Required
Prepare the consolidated statement of profit or loss and the movement on retained earnings for the 
Wheeler group for the year to 30 April 20X7. 
BPP Tutor Toolkit Copy

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CHAPTER 25
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THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS
 
447 
ANSWER 
WHEELER GROUP 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR TO 30 APRIL 20X7 
$'000 
Revenue (1,100 + 500) 
1,600 
Cost of sales (630 + 300) 
930 
Gross profit
670 
Administrative expenses (105 + 150) 
255 
Profit before taxation 
415 
Income taxes (65 + 10) 
75 
Profit for the year 
340 
Profit attributable to: 
Owners of the parent (bal fig) 
332 
NCI (20% 

40) 
8 
340 
Movement on retained earnings 
Group profit for year 
332 
Retained earnings brought forward (460 + 80% 

(106 – 56*)) 
500 
Retained earnings carried forward 
832 
* Retained earnings at acquisition
 
We will now look at the complications introduced by 
intra-group trading 
and 
acquisitions part way 
through the year
.