Question 1

H bought 90% of the equity share capital of S, two years ago on 1January 20X2 when the retained earnings of S stood at $5,000. Statements of financial position at the year end of 31 December 20X3 areas follows:

	H	S
Non-current assets
Property, plant & equipment	$ 100	$ 30
Investment at cost	$ 34
	$ 134
Current Assets
Inventory	$ 90	$ 20
Receivables	$ 110	$ 25
Bank	$ 10	$ 5
	$ 210	$ 50
	$ 344	$ 80
Equity:
Share Capital	$ 15	$ 5
Retained earnings	$ 159	$ 31
	$ 174	$ 36
Non-current liabilities	$ 120	$ 36
Current liabilities	$ 50	$ 16
	$ 344	$ 80

S transferred goods to H at a transfer price of $18,000 at a mark-up of 50%. Two-thirds remained in inventory at the year end. The current account in H and S stood at $22,000 on that day.

The H group uses the fair value method to value the non-controlling interest. The fair value of the non-controlling interest at acquisition was $4,000

Prepare the consolidated statement of financial position at 31/12/X3