1 The Consolidated Statement of Financial Position Electra is a small publicly listed company and on 1 April 20X8 it acquired 90% of the equity shares in Helios, a private limited company. On the same date Electra accepted a 10% loan note from Helios for $200,000 which was repayable at $40,000 per annum (on 31 March each year) over the next 5 years. Helios' retained earnings at the date of acquisition were $2,200,000. STAMENTS OF FINANCIAL POSITION AS AT 31 MARCH 20X9 ELECTRA $'000 HELIOS $'000 $'000 $'000 Assets Non-current assets Property plant & 2,120 equipment Intangible: Software 1,990 1,800 Investments: Equity in 4,110 Helios 10% loan note Helios 200 Other 65 6,495 210 4,000 Current Assets Inventories 719 560 Trade receivables 524 328 Helios current account 75 Cash 20 1,338 Total Assets 7,833 888 4,888 Equity & Liabilities Equity Equity shares of $1 each 2,000 1,500 Share Premium 2,000 500 Retained Earnings 2,900 6,900 1,955 3,955 Non-current liabilities 10% loan from Electra 160 Government Grant 230 40 200 Current Liabilities Trade payables 475 472 Electra current account 60 Income taxes payable 228 174 Operating overdraft 703 27 733 Total Equity & Liabilities 7,833 7,833 Notes: a. Included in Helios property at the date of acquisition was a leasehold property recorded at its depreciated historical cost of $400,000. On 1 April 20X8 the leasehold property was sublet for its remaining life of four years at an annual rental of $80,000 payable in advance on 1 April each year. The directors of Electra are of the opinion that the fair value of this leasehold property is best reflected by the present value of its future cash flows. An appropriate cost of capital for the group is 10% per annum. The present value of $1 annuity received at the end of each year where interest rates are 10% can be taken as: $ 3 year annuity 2,50 4 year annuity 3,50 b. The software of Helios represents the depreciation cost of the development of an integrated business accounting package. It was completed at a capitalized cost of $2,400,000 and went on sale on April 1 20X7. Helios directors are depreciating the software on a straight line basis over an eight-year life (i.e. $300,000 per annum). However the directors of Electra are of the opinion that a five year life would be more appropriate as sales of business software rarely exceed this period. c. The inventory of Electra on 31 March 20X9 contains goods at a transfer price of $25,000 that were supplied by Helios who had marked them up with a profit of 25% on cost. Unrealized profits are adjusted for against the profit of the company that made them. d. On 31 March 20X9 Helios remitted to Electra a cash payment of $55,000. This was not received by Electra until early April. It was made up of an annual repayment of the 10% loan note of $40,000 (interest had been already paid) and $15,000 on the current account balance. c. Goodwill is reviewed for impairment annually. At 31 March 20X9 there was an impairment loss of $120,000 in value of goodwill since acquisition. Required: Prepare the consolidated statement of financial position of Electra as at 31 March 20X9