On 1 July 2019, Parker purchased 85% of Skyklar by way of a share exchange of one new share in Parker for every two purchased in Skylar plus an immediate cash payment of $ 10.4 million. Parkers share price at the acquisition date was $ 5. Only the cash element of the consideration has been recorded by Parker.

The Statement of Financial Positions of both companies as at 30 June 2020 are as follows:

The following information is relevant:

1. Skyklars retained earnings at the date of acquisition was $ 3.8 million.

2. Parkers policy is to value the non-controlling interest at fair value at the date of acquisition. The share price of Skyklar at the date of acquisition was $ 3.

3. An impairment test carried out on 30 June 2020 revealed that consolidated goodwill was impaired by $ 2 million.

4. Skylar sold goods to Parker in the post-acquisition period at a markup of 25% for $ 20 million and 1/4 of these goods are included in the inventory of Parker at 30 June 2020.

5. Parkers trade payables of $ 3 million does not tally with Skylars trade receivables due to cash in transit of $ 1 million from Parker to Skylar.

6. The fair value of Skylars net assets differed from its carrying values at 1 July 2019. Plant had a fair value of $ 6 million in excess of its net book value and would create additional depreciation of $ 1.5 million in the post-acquisition period to 30 June 2020.

REQUIRED

Prepare the consolidated statement of financial position of Parker as at 30 June 2020.

Parker $ 000 Skylar $ 000 Non-current assets Property, plant and equipment Investments 38,600 17,000 55,600 20,000 1,500 21,500 Current assets Inventory Trade receivables Bank 15,000 14,500 6,000 35,500 8,000 7,000 8,000 23,000 Total assets 91,100 44,500 8,000 Equity and liabilities Ordinary shares of $ 0.50 each Share premium Retained earnings Total equity 60,000 8,000 8,100 76,100 10,000 18,000 Non-current liabilities 10% loan notes 5,000 2,000 Current Liabilities Trade payables 10,000 24,500 Total equity and liabilities 91,100 44,500