Statements of Financial Position - at 31st December 2019 On 15 January 2019 Smith PLC acquired 80% of the ordinary share capital of Jones PLC. The financial statements of Smith and Jones for the year ended 31 December 2019 are reproduced below. The following additional information Smith 000 Jones 000 At the date of acquisition, the fair values of Jones's assets were equal to their carrying amounts with the exception of its property. This had a fair value of 2 million above it's carrying amount. This would lead to an increase in the depreciation charge (in cost of sales) of 80,000. Jones has not accounted for this change in its financial statements. Non-current assets Property, Plant and machinery Cost of investment in Jones 15,000 38,500 18,000 56,500 15,000 Current assets Inventory Cash at bank Trade receivables Sales from Jones to Smith throughout the year ended 31 December 2019 had consistently been 2 million per month. Jones made a mark-up on cost of 50% on the items sold to Smith. Smith has 3 million (at cost to Smith) of goods that had been supplied by Jones remaining in their inventory as at 31st December 2019. Jones had not been paid for 25% of the December 2019 4,150 6,000 500 7,500 350 5,000 Total assets 70,500 24,500 (iii) Smith's policy is to value the non-controlling interest at fair value at the date of acquisition. At this date Jones's shares had a market price of 1.80 per share. Equity and liabilities Ordinary shares of 0.25 each Retained earnings 8.000 (iv) A goodwill impairment review indicates that the goodwill on the acquisition of Jones is to be impaired by 3 million. 16,000 18,000 34,000 13,500 Statements of Profit or Loss for the year ending 31st December 2019 Non-current liabilities 21,000 1,500 Current liabilities Trade payables Total equity and liabilities 15,500 70,500 9,500 24,500 Revenue Cost of Sales Gross Profit Distribution costs Administrative expenses Finance costs Profit before tax Income tax expense Profit for the year Smith Jones 000 000 129,500 63,000 (98,700) I (50,400) 30,800 12,600 (3.500) (1.800) (7,700) (3,500) (200) nil 19,400 7,300 (5,400) (2,300) 14,000 5,000 Required: Prepare the consolidated statement of financial position of Smith Group as at 31st December 2019 and statement of profit or loss of Smith Group for the year ending 31st December 2019. 100 Marks