Question 1

The Parent Company PC acquired 80% of Subsidiary SA for 160. At the date of acquisition, 31 December 2014, the two individual statements of financial position are as follows:

PC

ASSETS		Equity & Liabilities
Equipment	240	Capital	300
Investment in SA	160	Net Income	20
		Liabilities	80
Total	400	Total	400

SA

ASSETS		Equity & Liabilities
Equipment	230	Capital	140
		Net Income	60
		Liabilities	30
Total	230	Total	230

On 31 December 2016, the two statements of financial position are as follows:

PC

ASSETS		Equity & Liabilities
Equipment	480	Capital	300
Investment in SA	160	Retained Earnings	60
Cash	110	Net Income	100
		Liabilities	290
Total	750	Total	750

SA

ASSETS		Equity & Liabilities
Equipment	390	Capital	140
Inventory	70	Retained Earnings	180
Accounts Receivables	60	Net Income	150
Cash	140	Liabilities	190
Total	660	Total	660

Required:

Prepare the consolidated statement of financial position at the date of acquisition and as of 31 December 2016.

Question 2

On September 2011, J shares Ltd paid 40,000 to acquire 60% of the ordinary shared and 25% of the preference shares of K Ltd. On that date, the retained earnings of K Ltd were 4,000 and all of its assets and liabilities were shown at fair values. The statements of financial position of J Ltd and K Ltd as at 30 September 2014 are as follows:

	J Ltd ()	K Ltd ()
Assets
Non-current Assets
Property, Plant and Equipment	438,000	52,000
Investment in K Ltd	40,000	-
	478,000
Current Assets	432,000	36,000
	910,000	88,000
Equity
Ordinary Share Capital	600,000	50,000
Preference Share Capital	-	10,000
Retained Earnings	119,000	9,000
	719,000	69,000
Liabilities
Total Liabilities	191,000	19,000
	910,000	88,000

K Ltd has issued no shares since being acquired by J Ltd. Goodwill has suffered an impairment loss of 20% since acquisition. Non-controlling interests are to be measured at the appropriate proportion of the subsidiarys identifiable net assets.

Required:

Prepare the consolidated statement of financial position as at 30 September 2014.