On 31 December 2017, A3 Ltd paid ?550,000 to acquire 80% of the ordinary share capital of A4 Ltd. The statements of financial position of the two companies just after this transaction were as follows:

The fair value of the property, plant and equipment of A4 Ltd on 31 December 2017 was ?440,000. All other assets and liabilities were shown at fair value.

Required:

Prepare a consolidated statement of financial position as at 31 December 2017.

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A3 Ltd A4 Ltd £000 £000 Assets Non-current assets Property, plant and equipment 3,700 550 320 Investment in A4 Ltd 4,250 2,750 Current assets 250 570 7,000 Equity Ordinary share capital Retained earnings 2,000 3,550 100 280 5,550 380 Liabilities 190 Current liabilities 1,450 7,000 570