Consolidated statement of financial position with one subsidiary and one associate. On 1 October 2019 Ashen plc acquired the following non- current investments: a) 80% of the equity share of Larch Ltd at a cost of 13.6 million b) 50% of Larch's 10% loan notes at par c) 1.6 million equity shares in Cedar Ltd at a cost of 6.25 each. carrying amount and plant had a fair value of 1.6 million in excess of its carrying amount. The plant had a remaining useful life of four years at the date of acquisition. Straight-line depreciation is used for the plant. b) After the acquisition Ashen plc sold goods to Larch Ltd for 6 million. These goods had cost Ashen plc 4 million. 50% of the goods were still in the inventory of Larch Ltd as at 31 March 2020. Larch's trade payables and Ashen's trade receivables include 1.5 million for these goods that Larch Ltd is still owing to Ashen as at 31 March 2020. c) The after-tax profit for the year ended 31 March 2020 was 2 million for Larch Ltd and 8 million for Cedar Ltd. Assume that profits accrued evenly throughout the year. d) An impairment test at 31 March 2020 revealed that consolidated goodwill was impaired by 400,000 and the investment in Cedar Ltd was impaired by 200,000. e) No dividends were paid during the year by any of the companies f) Non-controlling interests in subsidiaries are measured at the proportionate share of the subsidiary's identifiable net assets. The statements of financial position of the three companies as at 31 March 2020 are shown below: Ashen plc Larch Ltd Cedar Ltd '000 '000 '000 Assets Non-current assets Property, plant and equipment Investments 8,500 20,000 26.000 46,000 15,000 61,000 16,500 1.500 18,000 11.000 29,000 8,500 8,000 16,500 Current assets Equity Required: Ordinary shares 1 each Retained earnings 10,000 37,000 47,000 3,000 8,000 11,000 4,000 20,000 24,000 1. Explain how the investments purchased by Ashen plc on 1 October 2019 should be treated in its consolidated financial statements. Liabilities Non-current liabilities 8% loan notes 10% loan notes Current liabilities 4,000 10,000 61,000 2,000 3,500 16,500 5.000 29,000 2. Prepare the consolidated statement of financial position for Ashen plc as at 31 March 2020. The following information is relevant: a) The fair values of Larch's assets were equal to their carrying amounts with the exception of land and plant. Larch's land had a fair value of 400,000 in excess of its Consolidated statement of financial position with one subsidiary and one associate. On 1 October 2019 Ashen plc acquired the following non- current investments: a) 80% of the equity share of Larch Ltd at a cost of 13.6 million b) 50% of Larch's 10% loan notes at par c) 1.6 million equity shares in Cedar Ltd at a cost of 6.25 each. carrying amount and plant had a fair value of 1.6 million in excess of its carrying amount. The plant had a remaining useful life of four years at the date of acquisition. Straight-line depreciation is used for the plant. b) After the acquisition Ashen plc sold goods to Larch Ltd for 6 million. These goods had cost Ashen plc 4 million. 50% of the goods were still in the inventory of Larch Ltd as at 31 March 2020. Larch's trade payables and Ashen's trade receivables include 1.5 million for these goods that Larch Ltd is still owing to Ashen as at 31 March 2020. c) The after-tax profit for the year ended 31 March 2020 was 2 million for Larch Ltd and 8 million for Cedar Ltd. Assume that profits accrued evenly throughout the year. d) An impairment test at 31 March 2020 revealed that consolidated goodwill was impaired by 400,000 and the investment in Cedar Ltd was impaired by 200,000. e) No dividends were paid during the year by any of the companies f) Non-controlling interests in subsidiaries are measured at the proportionate share of the subsidiary's identifiable net assets. The statements of financial position of the three companies as at 31 March 2020 are shown below: Ashen plc Larch Ltd Cedar Ltd '000 '000 '000 Assets Non-current assets Property, plant and equipment Investments 8,500 20,000 26.000 46,000 15,000 61,000 16,500 1.500 18,000 11.000 29,000 8,500 8,000 16,500 Current assets Equity Required: Ordinary shares 1 each Retained earnings 10,000 37,000 47,000 3,000 8,000 11,000 4,000 20,000 24,000 1. Explain how the investments purchased by Ashen plc on 1 October 2019 should be treated in its consolidated financial statements. Liabilities Non-current liabilities 8% loan notes 10% loan notes Current liabilities 4,000 10,000 61,000 2,000 3,500 16,500 5.000 29,000 2. Prepare the consolidated statement of financial position for Ashen plc as at 31 March 2020. The following information is relevant: a) The fair values of Larch's assets were equal to their carrying amounts with the exception of land and plant. Larch's land had a fair value of 400,000 in excess of its