Question
P acquired 75% of the share capital of S on its incorporation. The Statements of Financial Position of the two entities as at 31 December
P acquired 75% of the share capital of S on its incorporation. The Statements of Financial Position of the two entities as at 31 December 2020 are as follows:
P | S | |
Non current assets | 50,000 | 25,000 |
Investment in S, at cost | 15,000 |
|
Inventory | 13,000 | 7,000 |
Other current assets | 10,000 | 6,000 |
| 88,000 | 38,000 |
Share capital - $1 shares | 45,000 | 20,000 |
Retained earnings | 30,000 | 15,000 |
Current Liabilities | 13,000 | 3,000 |
| 88,000 | 38,000 |
During December 2020 S had sold goods to P for $6,000. S sells to P at cost plus 25%. P had not sold any of these goods and all were therefore included in inventory. Additionally, P had not paid S for these goods and therefore the sum of $6,000 is included in Ps payables and in Ss receivables.
Required: Prepare a Consolidated Statement of Financial Position at 31 December 2010.
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