Consolidated Financial Statements

Relationship between Parent and Subsidiary is Gold (Parent) and Silver (Subsidiary)

Gold acquired 30% of Bronze's share capital also

 

Question 1- 40 marks Gold plc, Silver plc and Bronze Ltd have produced the following statements of financial position as at 31st March 2021: ASSETS Non-current assets Property, plant and equipment (at NBV) Cost of Investment in Silver Cost of Investment in Bronze Total non-current assets Current assets Inventories Trade receivables Bank Total current assets Total assets EQUITY AND LIABILITIES Equity Equity shares of 1 each General reserve Retained earnings Total equity Non-current liability: Loan Current liabilities Trade payables Bank overdraft Total current liabilities Total equity and liabilities Gold m 2,100 800 120 3,020 880 580 280 1,740 4.760 2,400 60 800 3,260 400 1,100 Nil 1,100 4,760 Silver m 480 Nil Nil 480 280 420 8 708 1.188 680 10 190 880 Nil 228 80 308 1.188 Bronze m 237 Nil Nil 237 108 108 18 234 471 150 36 150 336 Nil 102 33 135 471 The following information is also available: 1) On 1st October 2010, Gold acquired 80% of the ordinary share capital of Silver when Silver's retained earnings were 72 million, and their general reserve was 4 million. 2) At the date of acquisition, Silver's property, plant and equipment was considered to have a fair value of 40 million more than the book value. This has increased depreciation, since acquisition and up to 31st March 2021, by 32 million. 3) At the date of acquisition, the market value of Silver's shares was 1.30 per share. 4) It is the group's policy to value the non-controlling interest at fair value.