On 1 April 20X9, P co acquired 60% of the equity share capital of S co in a share exchange of two shares in P co for three shares in S co. At that date the retained earnings of S co were $4.5 million. The issue of shares has not yet been recorded by P co. At the date of acquisition shares in P co had a market value of $6 each. Below are the summarized draft statements of financial position of both companies.

STATEMENTS OF FINANCIAL POSITION AS AT 30 SEPTEMBER 20X8

P co S co

Assets $'000 $'000

Non-current assets

Property, plant and equipment 42,200 11,500

Current assets 15,000 7,200

Total assets 57,600 18,700

Equity and liabilities

Equity shares of $1 each 10,000 4,000

Retained earnings 32,800 6,500

42,800 10,500

Non-current liabilities

10% loan notes 4,000 3,500

Current liabilities 14,800 4,700

Total equity and liabilities 57,600 18,700

The following information is relevant.

1) Sales from S co to P co in the post acquisition period were $8 million. S co made a mark up on cost of 40% on these sales. P co had sold $5.2 million (at cost to P co) of these goods by

30 September 20X8.

3) P co has a policy of accounting for any non-controlling interest at full fair value. The fair value of the non-controlling interest in S co at the date of acquisition was estimated to be $5.8 million. Consolidated goodwill was not impaired at 30 September 20X8.

Required

1. Prepare the consolidated statement of financial position for P co as at 30 September 20X8.