Question $10.$ Consolidated Statement of Financial Position

On $1$ January $2017$ Pierre purchased $32,000$ shares in Simone for an immediate cash payment of

$240,000.$ The retained earnings of Simone at $1$ January $2017$ were $120,000.$

The statements of financial position of the two entities at $31$ December $2021$ were as follows:

The following information is relevant:

a$)$ At the date of acquisition, Simone's land was valued at $108,000.$ There were no

additions to land since that date. The book values of the other net assets of Simone were

equal to their fair value.

b$)$ In addition, Pierre placed a value of $5,000$ on Simone's customer list. The management's

best estimate of its useful life was $10$ years at $1$ January $2017.$ The customer list is not

included in Simone's statement of financial position.

c$)$ On $1$ December $2021,$ Pierre bought inventory from Simone at a price of $40,000.$ Simone

sets its selling prices by marking up the cost by $25\%.$ By $31$ December $2021,$ Pierre has

sold half of this inventory to third parties.

d$)$ Included in Pierre's trade payables is a balance due to Simone of $20,000.$ Simone's

trade receivables include a balance of $30,000$ owing from Pierre. On $30$ December

$2021,$ a cheque for $10,000$ had been sent by Pierre to Simone, who received and banked

it on $3$ January $2020.$

e$)$ At the end of $2021,$ the directors estimate that goodwill has been impaired by $2,000.$

There has been no other impairment of goodwill since Pierre acquired the shares in Simone.

Required:

Prepare a consolidated statement of financial position for Pierre and its subsidiary as at

$31$ December $2021.$