A Co. owns 75 per cent of the shares in B Co., bought when the reserves of B were i200,000. The individual balance sheets of A and B as at 30.6.20X2 are given in Table 14.12. During the year, B has sold goods to A at a profit margin of 25 per cent on cost. i50,000 of these goods remain in A’s closing inventory as at 30.6.20X2. Also B owes A i2,000 as at 30.6.20X2. Prepare the consolidated balance sheet as at 30.6.20X2.

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Table 14.12 Individual balance sheets as at 30.6.20X2 Assets A 000s B 000s Land and plant 1,000 200 Investment in B 275 Inventory 600 400 Debtors (receivables) 200 40 2,075 640 Liabilities Creditors (payables) 30 16 2,045 624 Represented by: Ordinary 1 shares 1,000 100 Reserves 1,045 524 2,045 624