Penny Ltd acquired 450,000 of the ordinary shares of Shilling Ltd on 30 September 20X7.

The balance sheets of the two companies as at 31 December 20X7 were as follows:

	Penny		Shilling
ASSETS	'000		'000
Non-current assets
Property plant & equipment	740		430
Investments
in Shilling	650		-
	1,390		430
Inventory	330		200
Receivables	210		160
Cash	45		30
	1,975		820
EQUITY AND LIABILITIES
Equity
Share capital (1 ordinary shares)	800		600
Retained earnings	890		150
	1,690		750
Bank Loan	200		50
Payables	85		20
	1,975		820

Notes

1. There have been no changes in the share capital of either company since the

acquisition.

2. The retained earnings of Shilling Ltd on 30 September 20X7 were 120,000.

3. At the date of acquisition, the fair value of the land owned by Shilling was 40,000

higher than the book value.

4. On the acquisition date, Penny sold goods to Shilling at a mark-up on cost of 50%.

These goods had originally cost Penny 200,000. At the reporting date, half of this

inventory is unsold by Shilling. The remainder of the goods have been sold outside

the group.

5. On 31 December 20X7, the goodwill arising on the acquisition of Shilling is deemed

to have been impaired by 10,000 since the date of acquisition.

Required

Prepare the consolidated statement of financial position for the Penny Group as at 31 December 20X7, in accordance with international financial reporting standards.