P Ltd acquired 75 of S Ltd on 1 10 2019 giving 2 new shares (market value $2) in P Ltd for every 5 acquired shares in S ltd Additionally, P Ltd issued to shareholders of S Ltd a $100 10 loan note for every 1000 shares acquired in S Ltd The purchase consideration was not recorded in P Ltd accounts Statement of financial position as at 31 03 2020 P Ltd S Ltd $000 $000 Assets Non current assets Property, plant equipment 48000 25000 Equity investments (note 1) 7500 3500 55500 28500 Current assets Inventory (note 2) 17500 8500 Trade receivables (note 3) 15000 10000 Bank 5000 0 37500 18500 Total assets 93000 47000 Equity and liabilities Equity Equity shares $1 39000 21000 Retained earnings 1 4 2019 20000 (5000) Retained earnings for Y E 31 3 2020 8000 7000 67000 23000 Non current liabilities 10 loan notes 10000 0 Current liabilities Trade payables (note 3) 16000 14000 Bank overdraft 0 10000 16000 24000 Total equity and liabilities 93000 47000 Notes According to a draft statement of profit and loss prepared at the acquisition date, S Ltd made a net loss of $2 million for the year and P Ltd accepted it as the basis for calculating the pre acquisition and the post acquisition share of the profit of S Ltd for the year ended 31 03 2020 At the acquisition date, P Ltd made a fair value evaluation of S Ltd net assets and found that a plant, with a remaining useful life of 3 years, had a fair value $3 million below its carrying amount P Ltd value NCI at fair value at the acquisition date and S Ltd share price of $1 25 is considered to be fair value P Ltd made sales to S Ltd $4 5 million per month since acquisition with a 20 mark upon cost S Ltd had one months supply of these goods in stock at 31 03 2020 P Ltd's normal mark up on cost is 30 S Ltd's current balance with P Ltd at 31 03 2020 was $3 million and did not agree with P Ltd's equivalent receivable due to a payment of $1 million made by S Ltd 0n 28 03 2020 which was received by P Ltd on 3 4 2020 The equity investments of P Ltd and S Ltd are carried at their fair values as of 1 4 2019 As of 31 3 2020, these had fair values of $7 million and $4 million respectively There were no impairment losses during the year Required Prepare the consolidated statement of financial position for P Ltd as of 31 3 2020

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P Ltd acquired 75% of S Ltd on 1.10.2019 giving 2 new shares (market value $2) in P Ltd for every 5 acquired shares in

P Ltd acquired 75% of S Ltd on 1.10.2019 giving 2 new shares (market value $2) in P Ltd for every 5 acquired shares in S ltd. Additionally, P Ltd issued to shareholders of S Ltd a $100 10% loan note for every 1000 shares acquired in S Ltd.

The purchase consideration was not recorded in P Ltd accounts.

Statement of financial position as at 31.03.2020

P Ltd S Ltd

$000 $000

Assets

Non-current assets

Property, plant & equipment 48000 25000

Equity investments (note 1) 7500 3500

55500 28500

Current assets

Inventory (note 2) 17500 8500

Trade receivables (note 3) 15000 10000

Bank 5000 0

37500 18500

Total assets 93000 47000

Equity and liabilities

Equity

Equity shares $1 39000 21000

Retained earnings-1.4.2019 20000 (5000)

Retained earnings for Y/E 31.3.2020 8000 7000

67000 23000

Non-current liabilities

10% loan notes 10000 0

Current liabilities

Trade payables (note 3) 16000 14000

Bank overdraft 0 10000

16000 24000

Total equity and liabilities 93000 47000

Notes

According to a draft statement of profit and loss prepared at the acquisition date, S Ltd made a net loss of $2 million for the year and P Ltd accepted it as the basis for calculating the pre-acquisition and the post-acquisition share of the profit of S Ltd for the year ended 31.03.2020.

At the acquisition date, P Ltd made a fair value evaluation of S Ltd net assets and found that a plant, with a remaining useful life of 3 years, had a fair value $3 million below its carrying amount.

P Ltd value NCI at fair value at the acquisition date and S Ltd share price of $1.25 is considered to be fair value.

P Ltd made sales to S Ltd $4.5 million per month since acquisition with a 20% mark upon cost. S Ltd had one month’s supply of these goods in stock at 31.03.2020. P Ltd's normal mark-up on cost is 30%.

S Ltd's current balance with P Ltd at 31.03.2020 was $3 million and did not agree with P Ltd's equivalent receivable due to a payment of $1 million made by S Ltd 0n 28.03.2020 which was received by P Ltd on 3.4.2020.

The equity investments of P Ltd and S Ltd are carried at their fair values as of 1.4.2019. As of 31.3.2020, these had fair values of $7 million and $4 million respectively.