Answer four questions from this section.

1. The statements of comprehensive income of Ball Plc, Bat Ltd and Stump Ltd for the year ended 31 December 2016 are given as follows:

Ball Plc acquired 80% of Bat Ltd on 1 January 2013 for £600,000 when Bat Ltd's retained earnings were £80,000. The share capital of Bat Ltd totalled £200,000 on 1 January 2013. There has been no change in Bat Ltd’s share capital since this date.

During 2016 Bat Ltd sold goods costing £16,000 to Ball Plc for £56,000. 20% of this inventory is included in Ball Plc’s inventory at the year end.

Ball Plc acquired 25% of Stump Ltd on 1 January 2015 for £800,000 when Stump Ltd’s share capital and reserves were £300,000. The share capital of Stump Ltd is made up of 80,000 shares of 50p each.

During 2016 Stump Ltd sold goods costing £24,000 to Ball Plc for £32,000. 50% of this inventory is still in Ball Plc’s inventory at the year end.

Goodwill is capitalised. Impairment of 10% is seen against the goodwill of Bat Ltd in 2016 and impairment of 20% was seen against the goodwill of Stump Ltd in 2016.

At the year end Ball Plc charges Bat Ltd a management fee of £10,000 and Stump Ltd a management fee of £8,000. The management fee receivable by Ball Plc is included in sundry income and management fee payable by Bat Ltd and Stump Ltd is included in administration costs.

Ball Plc owns 50% of the bonds of both Bat Ltd and Stump Ltd.

Retained earnings brought forward as at 1 January 2016 are as follows:

Ball Plc             £900,000

Bat Ltd             £700,000

Stump Ltd       £500,000

Required

Prepare the consolidated statement of comprehensive income for Ball Plc for the year ended 31 December 2016. Show the non-controlling interest and the retained earnings brought forward, either on the face of the statement of comprehensive income or in a separate calculation.