$

Share capital 250 000

Retained earnings 200 000

----------------

450 000

At the date of acquisition all assets were considered to be fairly valued.

During the year Andy Ltd made total sales to Irons Ltd of $81 250, while Irons Ltd sold $65 000 in inventory to

Andy Ltd.

The opening inventory in Andy Ltd as at 1 July 2022 included inventory acquired from Irons Ltd for $52 500 that

cost Irons Ltd $43 750 to produce.

The closing inventory in Andy Ltd includes inventory acquired from Irons Ltd at a cost of $42 000. This cost Irons

Ltd $35 000 to produce.

The closing inventory of Irons Ltd includes inventory acquired from Andy Ltd at a cost of $15 000. This cost Andy

Ltd $12 000 to produce.

The management of Andy Ltd believe that goodwill acquired was impaired by $3750 in the current financial year.

Previous impairments of goodwill amounted to $20 000.

On 1 July 2022 Andy Ltd sold an item of plant to Irons Ltd for $145 000 when its carrying amount in Andy Ltds

accounts was $101 250 (cost $168 750, accumulated depreciation $67 500). This plant is assessed as having a

remaining useful life of six years. The Group has a policy of measuring its property, plant, and equipment using the

cost model. The group uses the straight-line method of depreciation.

Irons Ltd paid $33 125 in management fees to Andy Ltd.

The tax rate is 30 per cent.

Required

Prepare the consolidated statement of financial position and consolidated statement of profit or loss

and other comprehensive income of Andy Ltd and Irons Ltd as at 30 June 2023. Also, provide a statement of changes

in equity.

725 000 The following financial statements of Andy Ltd and its subsidiary Irons Ltd have been extracted from their financial records at 30 June 2023. Andy Ltd Irons Ltd ($) ($) ) Reconciliation of opening and closing retained earnings Sales revenue 839 250 Cost of goods sold (580 000) (297 500) ( Gross profit 259 250 427 500 Dividends received from Irons Ltd 116 250 Management fee revenue 33 125 Gain on sale of plant 43750 Expenses Administrative expenses (38 500) (48 375) Depreciation (30 625) (71 000) Management fee expense (33 125) Other expenses (126 375) (96 250) Profit before tax 256 875 178 750 Tax expense (76 875) (52 750) Profit for the year 180 000 126 000 Retained earnings-1 July 2022 399 250 299 000 579 250 425 000 Dividends paid (171 750) (116 250) Retained earnings-30 June 2023 407 500 308 750 Andy Ltd Irons Ltd ($) Statement of financial position Shareholders' equity Retained earnings 407 500 308 750 Share capital 437 500 250 000 Current liabilities Accounts payable 57 875 Tax payable 100 000 31 250 Non-current liabilities - Loans 236 000 145 000 1 181 000 792 875 Current assets Accounts receivable 74 250 77 875 Inventory 115 000 36 250 Non-current assets Land and buildings 198 750 407 500 Plant-at cost 400 000 444 750 Accumulated depreciation (107 000) (173 500) Investment in Irons Ltd 500 000 1 181 000 792 875 Other information Andy Ltd acquired its 100 per cent interest in Irons Ltd on 1 July 2016-that is, seven years earlier. The cost of the investment was $500 000. At that date the capital and reserves of Irons Ltd were: $