The balance sheets of A and B as at 31 December 20X4 are as shown in Figure 14.8.

In addition:

(a) A had acquired 37,500 shares in B in 20X0 when there was a debit balance on the reserves of i3,000.

(b) B purchases goods from A, providing A with a gross profit on the invoice price of 33 1/3 per cent. On 31 December 20X4 the inventory of B still included an amount of i8,000, being goods purchased from A for i9,000.

Prepare the consolidated balance sheet of A and its subsidiary as at 31 December 20X4.

Transcribed Image Text:

Figure 14.8 Balance sheets for A and B as at 31 December 20X4 A B 000s 000s Land and buildings 108 less Depreciation 20 88 12 64 32 32 Plant and machinery 65 43 less Depreciation 25 40 29 14 128 46 Investment: shares in B 35 Inventory Debtors Bank 25 27 48 21 22 6 95 54 Creditors (current) 112 (17) 34 20 146 66 Ordinary 1 shares 100 50 Share premium Reserves 10 36 146 16 66