Alpha paid £520 to acquire 360 shares in Beta on 1 April 2009 when:

(i) Beta’s retained earnings were £80 and

(ii) Beta’s property had a market value which exceeded the book value by £100.

(iii) Beta’s share were quoted at 140 pence each.

You are informed as follows:

(a) Alpha’s trade receivables includes £85 due from Beta; Beta agrees with the amount subject to £15 cash remaining in transit.

(b) Beta’s inventory includes goods invoiced to it by Alpha at £80. Alpha invoices Beta at cost plus a third.

(c) Based on fair value Beta should have written off an additional depreciation of £5 per year in each of the three post-acquisition years.

(d) As at 31 March 2012 goodwill in Beta was valued at £6.

Required: 

Prepare the Consolidated Statement of financial position of the Alpha group as at 31.3.2012.

Transcribed Image Text:

Statements of financial position as at 31 March 2012 Non-current assets: Property, plant and equipment Investments Current assets: Inventory Trade receivables Cash and bank Alpha £ 900 780 380 420 30 2,510 Beta £ 500 40 210 285 15 1,050