consolidated financial statements

1. Consolidated Financial Statements You have been asked by a friend, Elsa, who is new to the approaches of consolidated accounting to review her workings for the consolidation of the Ham Group. Ham plc acquired 70% of the ordinary shares of Sam Ltd and 30% of the ordinary shares of Adam Ltd during the financial year. All three companies prepared financial statements at 31 December 2020 as follows: Statements of Financial Position as Ham Sam Adam at 31 December 2020 '000 '000 '000 Non-Current Assets 500 200 100 Investment in Sam 220 Investment in Adam 80 Other net assets 100 50 50 900 250 150 Ordinary Share Capital 200 100 100 Retained Earnings 700 150 50 900 250 150 The retained eamings of Sam and Adam at the date of acquisition were 120,000 and 40,000, respectively. Elsa has produced the following draft Consolidated Statement of Financial Position (including her workings): Draft Consolidation workings: '000 Non-Current Assets (500 + (70% x 200) + (30% x 100)] 670 Goodwill (Sam) (220 - (100 + 120) x 70%)] 66 Goodwill (Adam) (80 - (100 + 40) X 30%)] 38 Other net assets (100 + (70% x 50) + (30% x 50)] 150 924 Ordinary Share Capital 200 Retained Earnings: Ham 700 - share of Sam's profit [70%