Harry acquired control of Sally on 1 August Year 3, subscribing for 3 million of the 4 million $1 ordinary shares issued by Sally. The net assets of Sally, as reported in its

statement of financial position at this date, amounted to $10 million. There was no trading between the two entities, but Harry made a five year, interest free, loan to

Sally on 1 December Year 3.

The draft statements of financial position of the two companies as of 31 July Year 4 were as follows.

Harry Sally

Non-current assets

Property, plant and equipment at net book value 41,000 -

Freehold land at cost in Year 2 - 10,000

Investment in subsidiary 12,000 -

Current assets

Inventories 20,000 16,000

Loan to Sally 5,000 -

Other receivables 25,000 15,000

Equity

Ordinary share capital ($1 shares) 40,000 4,000

Retained earnings 36,000 8,000

Current liabilities

Payables 27,000 24,000

Loan from Harry - 5,000

The fair value of Sally's land at the date of acquisition was $12 million.

Goodwill has suffered impairment of $2,000 since acquisition.

For purposes of consolidation, the parent company measures the non-controlling interest (NCI) in Sally at the NC's proportionate share of the identifiable net assets of Sally (the 'traditional' or 'old' method).

Required

Prepare a consolidated statement of financial position as at 31 July Year 4