The consolidated (Group's) figure for the Inventory at 31 December 2010 is ?

Multiple Choice Exam

The follwoing relates to all questions

Parent plc acquired 64% of Sub plc's share capital at 1 January 2009. The balance on Sub plc's retained earnings at that date was $1,500. Sub has not issued any shares since that date(share capital =$ 3,000 at acquisiton date). The following information is also relevant:

A-In arriving at the consideration for the shares in Sub, the fair value of Sub' property, plant and equipment were found to be $100 below the book value -10 year remaining life.

B-During the current year 2010, Parent plc sold inventory to Sub plc at a cost of $200. The sale yielded a gross profit percentage of 20%. Three quarters of these goods were sold by Sub plc by 31 December 2010.

C-Goodwill was impaired by 90% during the year 2010. There was no impairment in 2009.

D-At 1 January 2009 - immediately after the acquisition- Sub plc sold a depreciable plant asset to Parent plc for $5,100.The PPE sold had a cost of $9,000 and an accumulated depreciation of $ 4,500 at date of sale. The asset is depreciated by the parent over its remaining useful life of 6 years using the straight line method.

E-Goodwill is calculated using the full goodwill method.

The statements of financial position for the two companies were as follows as at 31 December 2010

The statements of financial position for the two companies were as follows as at 31 December 2010

Parent $

Sub $

Non-Current Assets

Plant property and Equipment

15,460

9,000

Investment in Sub plc at cost

8,500

Current Assets

Inventory

1,800

770

Accounts Receivable

1,000

650

Cash

450

-

Total Assets

27,210

10,420

Current Liabilities

Accounts payable

2,210

2,920

Equity

Share Capital

10,000

3,000

Retained Earnings

15,000

4,500

Total Liabilities and Equity

27,210

10,420

Select one:

a. 2607.5

b. 2560.5

c. 2557.5

d. 2570.5