QUESTION #$2(35$ Marks$)$:$-90$ MINUTES

On December ${31}^{a.}$ Year $2.x$ purchased $70\%$ of the outstanding ordinary shares of $Y$ for $$350,000.$

At this date, Y had ordinary shares of $$240,000$ and retained earnings of $$84,000.$

Below are the consolidated financial statements of the $x$ Company and the $Y$ Company for the year ended December ${31}^{mt}.,$ Year $6.$

STATEMENTS OF FINANCIAL POSITION

December ${31}^T.$Year $6$

X$.$

ASSETS:

Plant Assets$($net$).$

$.$$$270,000.$$$200,000$

Investment in $Y.350,000$

Other Investments. $86,000.$

Notes receivable. $.0.q,36,000$

Inventory $q,140,000q,14,000$

Accounts receivable $q,92,000q,210,000$

Cash $q,24,000.q,180,000$

TOTAL ASSETS. $q,.$$$962,00034,000$

Ordinary Shares. $q,540,000q,240,000$

Retained Earnings. $q,150,000.q,190,000$

Notes Payable. $q,150,000q,110,000$

Other current liabilities. $q,$

Accounts Payable. $q,14,000.54,000108,000q,80,000$

OTAL LIABILITIES & OWNERS' EQUITY. $q,$ $$962,000q,$ $$674,000$

$3$