Question 1

The Summarised statement of financial position of Bartam Plc and Jolar Ltd as at 31^st December 2019 are as below:

	Bartam Plc	Jolar Ltd.
	000	000
Assets
Non-current assets
Investment in Jolar Ltd	420
Property, Plant and Equipment	1,520	241
	1,940	241
Current Assets
Inventories	238	64
Trade receivables	26	30
Cash and cash equivalents	39	18
	303	112
Total Assets	2,343	353
Equity and Liabilities
Share capital	1,800	240
Retained earnings	172	60
Total equity	1,972	300
Non-current liabilities	234	19
Current liabilities
Trade payables	103	26
Taxation	34	8
Total equity and liabilities	2,343	353

Further Information:

• On 1^st January 2019 Bartam Plc acquired 80% of the issued share capital and voting rights of Jolar Ltd for 420,000. At that date, Jolar Ltd had issued share capital 240,000 and retained earnings of 20,000.
• The fair value of the non-current assets of Jolar Ltd on 1^st January 2019 was 100,000 more than the carrying amount. This revaluation has not been recorded in the books of Jolar Ltd.

• The directors of Bartam Plc have concluded that the goodwill arising on the acquisition of Jolar Ltd has been impaired by 25,000 during the year.

• Included in the trade receivables of Bartam Plc and the trade payables of Jolar at 31^st December 2019 is an inter-company balance of 6,000.

• Bartam Plc has decided non-controlling interest will be valued at their proportionate share of net assets.

1. Prepare consolidated statement of financial position of Bartam Plc and its subsidiary as at 31^st December 2019.

Note- clearly show your working.

2. Explain briefly the following terms in relation to consolidated financial statements.

1. Pre and post-acquisition profits
2. Equity Accounting
3. Unrealised profits