Part b

The following represents the abridged statement of financial position of Bensam Ltd (Bensam) and its subsidiary Chinks Ltd (Chinks).

Statements of Financial Position as at 30 June 2005.

Bensam Chinks

N$ N$

ASSETS

Property at cost/valuation 750 000 400 000

Machinery 340 000 160 000

@ Cost 500 000 240 000

Accumulated depreciation (160 000) (50 000)

Plant at carrying amount 680 000 370 000

Investments in Chinks :

80 000 ordinary shares at fair value(cost price N$650 000) 650 000 -

25 000 12% cumulative preference shares at fair value (cost price N$40 000) 40 000 -

9% Debentures (since 2003) 50 000 -

Unsecured loan at fair value 80 000 -

Current Account-Bensam - 75 000

Inventory 170 000 150 000

Trade and other receivables 220 000 260 000

Bills receivable-Chinks 20 000 -

Bank-NBS Bank 30 000 -

3 030 000 1 445 000

EQUITY AND LIABILITIES

Ordinary shares at N$5 each - 500 000

Ordinary shares at N$2 each 900 000

12% Cumulative preference shares at 75c each - 75 000

Revaluation of property - 150 000

Retained earnings 1 816 750 306 000

Interest bearing borrowings 64 750 170 000

9% debentures - 100 000

Loan Bensam - 70 000

Current Account-Chinks 64 750

Trade and other payables 220 000 140 000

Bills payable-Bensam - 25 000

Bank overdraft-NBS Bank - 60 000

Shareholders for dividends-Ordinary shares 28500 10000

Preference shares (current year) - 9 000

3 030 000 1 445 000

Additional Information:

1. Bensam acquired its interest in Chinks on 1January 2002. At that date the retained earnings of Chinks amounted to N$120 000. On the same day the property of Chinks which had a carrying amount of N$250 000 was revalued at N$350 000. It is company policy to revalue Chinks property on 30 June every second year. Since 1 July 2002 Chinks has not purchased or sold any property. At the date of acquisition, consider the carrying amount of all the other assets and liabilities of Chinks to be equal to the fair value thereof.

2. No dividend was declared or paid by Chinks during the period 1 July 2001 and 30 June 2002 3. Assume each ordinary share carries one vote.

4. Its group policy to show goodwill at cost in the financial statements.

5. Since September 2002, Chinks purchased all its inventories from Bensam at the normal selling price, determined by Bensam which is cost plus 20%.

6. Chinks sold a machine to Bensam on 1 January 2004 at a profit of N$25 000. The group provides for depreciation at 20% per annum according to the reducing balance method.

7. Bensam discounted the N$5 000 of the Bills receivable from Chinks at the bank before the expiry date of 31 July 2005.

8. On 29 June 2005, Chinks repaid N$10 000 of the existing loan from Bensam. Bensam received the repayment on 7 July 2005. 9. The parent guarantees the overdraft of the subsidiarys bank account.

10. Ignore tax implications

Required: Marks Prepare the consolidated Statement of financial position of Bensam and its subsidiary as at 30 June 2005 according to the requirements of IFRS. showing all necessary workings as they carry marks.