P acquired 75% of the shares in S on 1 January 20X7 when S had retained earnings of 15,000. The market price of Ss shares at the date of acquisition was 1.60. P values non-controlling interest at fair value at the date of acquisition. Goodwill is not impaired.

P S

Property, plant and equipment 80,000 60,000

Shares in S 68,000

Total Non Current Assets 148,000 60,000

Current Assets 52,000 35,000

Total Assets 200,000 95,000

Share capital - 1 shares 100,000 50,000

Retained earnings 70,000 25,000

Total Equity 170,000 75,000

Current liabilities 30,000 20,000

Total Equity and liabilities 200,000 95,000

1. Prepare the consolidated balance sheet of P Group

2. Explain and comment the process of consolidation?