The statements of financial position for ER and MR as at 31 December 20X2 are provided below.

Additional information: 

1.  ER acquired 80 per cent of the equity share capital of MR on 1 January 20X0 for $2,000,000 when the retained earnings of MR were $1,200,000. There have been no share issues since the date of acquisition of MR. 

2. At the date of acquisition, the fair value of the net assets of MR was the same as the book value with the exception of property, plant and equipment. The fair value of property, plant and equipment was $400,000 higher than the book value. Property, plant and equipment had an estimated useful life of ten years from the date of acquisition. 

3. Non-controlling interest was valued at its fair value of $450,000 at the date of acquisition. 

4. There has been no impairment of goodwill since the date of acquisition. 

5. ER purchased goods from MR for $200,000 during the year ended 31 December 20X2 and 25 per cent of these items remain in ER’s inventories at the year end. MR earns a 20 per cent profit margin on all sales. 

Required:

Prepare the consolidated statement of financial position for the ER group as at 31 December 20X2.

Transcribed Image Text:

Assets Non-current assets Property, plant and equipment Investment in MR Current assets Total assets Equity and liabilities Share capital ($1 shares) Retained earnings Total equity Non-current liabilities Long-term borrowings Current liabilities Total liabilities Total equity and liabilities ER $000 5,900 2,000 7,900 3,200 11,100 5,000 3,800 8,800 1,300 1,000 2,300 11,100 MR $000 2,000 2,000 1,000 3,000 500 2,000 2,500 500 500 3,000