Prepare the consolidated statement of financial position for Parent Co as at 31 March 20X6.
Non-current assets Property, plant and equipment (note () 75.200 Investment in Alpha Co at 1 April 20X5 (note (iv)) 4.500 31,500 Current assets Inventory (note (iin) 19.400 18,800 Bank Trade receivables (note (iii)) 14.700 12,500 1,200 600 Total assets 115,000 63,400 Equity shares of $1 each 50,000 20,000 Retained earnings - at 1 April 20X5 19.000 20,000 - for year ended 31 March 20X6 17,000 7,000 Non-current liabilities 8% loam notes 5.000 Current liabilities (note (iin)) 24.000 16,400 Total equity and liabilities 115,000 63,400 The following information is relevant: i. At the date of acquisition, the fair values of Subsidiary Co's assets were equal to their carrying amounts. However, Subsidiary Co. operates a mine which requires to be decommissioned in five years' time No provision has been made for these decommissioning costs by Subsidiary Co. The present value (discounted at 10%) of the decommissioning is estimated at $3m and will be paid four years from the date of acquisition (the end of the mine's life). ii Parent Co's policy is to value the non-controlling interest at fair value at the date of acquisition Subsidiary Co's share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The inventory of Subsidiary Co includes goods bought from Parent Co for $1 9m. Parent Co applies a consistent margin on of 25% when arriving at its selling prices. On 29 March 20X6. Parent Co dispatched goods to Subsidiary Co with a selling price of $400,000. These were not received by Subsidiary Co until after the year end and so have not been included in the above inventory at 31 March 20X6. At 31 March 20X6, Parent Co's records showed a receivable due from Subsidiary Co of $2.5m, this differed to the equivalent payable in Subsidiary Co's records due to the goods in transit. The intra- group reconciliation should be achieved by assuming that Subsidiary Co had received the goods in transit before the year end. iv. The investment in Alpha Co represents 35% of its voting share capital and Parent Co uses equity accounting to account for this investment. Alpha Co's profit for the year ended 31 March 20X6 was 56mThe following information is relevant: i. At the date of acquisition, the fair values of Subsidiary Co's assets were equal to their carrying amounts. However, Subsidiary Co. operates a mine which requires to be decommissioned in five years' time No provision has been made for there decommissioning costs by Subsidiary Co. The present value (discounted at 10%) of the decommissioning is estimated at $3m and will be paid four years from the date of acquisition (the end of the mine's life). ii. Parent Co's policy is to value the non-controlling interest at fair value at the date of acquisition Subsidiary Co's share price at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest Hi. The inventory of Subsidiary Co includes goods bought from Parent Co for $1 9m. Parent Co applies a consistent margin on of 25% when arriving at its selling prices. On 29 March 20%6. Parent Co dispatched goods to Subsidiary Co with a selling price of $400,000. These were not received by Subsidiary Co until after the year end and so have not been included in the above inventory at 31 March 20X6. At 31 March 20X6, Parent Co's records showed a receivable due from Subsidiary Co of $2.5m, this differed to the equivalent payable in Subsidiary Co's records due to the goods in transit. The intra- group reconciliation should be achieved by assuming that Subsidiary Co had received the goods in transit before the year end iv. The investment in Alpha Co represents 35% of its voting share capital and Parent Co uses equity accounting to account for this investment. Alpha Co's profit for the year ended 31 March 20X6 was $6m V. All profits and losses accrued evenly throughout the year. vi. An impairment review shows that Goodwill has been impaired by $1m year ended 31 March 20X6
