Question 3 Voltaire Industries set up a UK subsidiary, Candide Ltd, on 1 July 2015 with an investment of $17 million. The subsidiary borrowed 500,000 on the UK market and purchased a leasehold factory for 300,000 and plant for 1 million. The draft statements of financial position of the two companies as at 30 June 2016 are given below Voltaire Candide E'000 $'000 $'000 315,000 850,000 E'000 Non-current assets Leaseholds Accumulated depreciation Plant 3,000 75,000 240,000 -300 2,700 10,000 Accumulated depreciation Investment in Candide 375,000 475,000 17,000 732,000 2,000 8,000 10,700 1,750 2,500 Current assets 85,000 120,000 Inventories Receivables Cash 163,000 368,000 2,500 6,750 Creditors due in less than 1 year 250,000 -1,250 Net current assets 118,000 5,500 Creditors due in 5,000 11,200 10,000 more than 1 year 100,000 Total net assets Financed by equity Share capital Reserve 750,000 400,000 Profit for the year Total equity 250,000 100,000 750,000 1,200 11,200