Parent Ltd acquired 80% of the equity in Sub Ltd on 1 April 2009 for $1 200 000.

At the date of acquisition the equity of Sub Ltd was comprised of share capital of $745 000 and retained earnings of $278 000.

Sub Ltd uses the cost model for its property, plant and equipment. At the date of acquisition Sub Ltd had property with a book value of $300 000 which had a fair value of $630 000, and equipment with a book value of $120 000 which had a fair value of $80 000. Sub Ltd also had contingent liabilities of $32 000.

Parent Ltd has requested your help in the preparation of their consolidated financial statements for the financial year ended 31 March 2020 and has provided you with the following information:

In 2012 the total goodwill of Sub Ltd was considered by the directors to be impaired by

$ 5 000 and the total goodwill was impaired again in 2017 by $ 7 600.

During March 2019 Sub Ltd made sales to Parent Ltd which resulted in an unrealised group profit of $1 300.

During March 2020 Sub Ltd made sales to Parent Ltd which resulted in an unrealised group profit of $700.

During March 2020 Parent Ltd made sales to Sub Ltd which resulted in an unrealised group profit of $1 500.

The current equity of Sub Ltd at 31 March 2020 comprised:

Share capital

$745 000

Retained earnings - opening

310 000

Profit after tax

420 000

Dividend declared

175 000