The following are the statements of financial position of Pirate plc and Saint plc for the year ended 31 December 2010 Statement of Financial position as at 31 December 2010 Pirate Saint Non Current Assets Plant property and Equipment 10,350 9,520 Investment in Saint plc 5,485 Current Assets Inventory 1,600 1,020 Accounts Receivable 970 600 Cash 6,031 170 Total Assets 24,436 11,310 Current Liabilities Accounts payable 1,290 1,125 Equity share capital 15,500 4,800 Retained Earnings 7,646 5,385 Total Liabilities and Equity 24,436 11,310 The following information is also relevant Pirate acquired 80 of the share capital of Saint in 1 January 2009 when Saint plc had the following balances Saint Share capital 4,800 Retained Earnings 2,400 In arriving at the consideration for the shares in Saint plc, the fair value of Saints PPE was agreed at $ 500 below the book value 10 year remaining life for this PPE using straight line method During the current year 2010 Piarte plc sold merchandise inventory to Saint at an invoice price of $ 400 on which Pirate made a gross profit of 25 One quarter (1 4) of these goods remained in the inventory of Saint plc at 31 December 2010 Goodwill was impaired by $ 50 during the year 2010 There was no impairment in 2009 At 1 January 2010, Pirate sold a depreciable plant asset to Saint for $ 275 The sold plant asset had a cost of $1,000 and an accumulated depreciation of $ 750 This asset is deprecated by Saint using straight line method over its remaining useful life of 5 years including full depreciation in year of purchase Full goodwill method is used Required Prepare the consolidated Balance Sheet as at 31 December 2010 and make sure to show all calculations and journal entries

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Posted on Jul 24, 2024

The following are the statements of financial position of Pirate plc and Saint plc for the year ended 31 December 2010.

Statement of Financial position as at 31 December 2010

	Pirate	Saint
Non-Current Assets
Plant property and Equipment	10,350	9,520
Investment in Saint plc	5,485
Current Assets
Inventory	1,600	1,020
Accounts Receivable	970	600
Cash	6,031	170
Total Assets	24,436	11,310
Current Liabilities
Accounts payable	1,290	1,125
Equity
share capital	15,500	4,800
Retained Earnings	7,646	5,385
Total Liabilities and Equity	24,436	11,310

The following information is also relevant

Pirate acquired 80% of the share capital of Saint in 1 January 2009 when Saint plc had the following balances

In arriving at the consideration for the shares in Saint plc, the fair value of Saints PPE was agreed at $ 500 below the book value. 10 year remaining life for this PPE using straight line method.
During the current year 2010 Piarte plc sold merchandise inventory to Saint at an invoice price of $ 400 on which Pirate made a gross profit of 25%. One quarter (1/4) of these goods remained in the inventory of Saint plc at 31 December 2010.
Goodwill was impaired by $ 50 during the year 2010. There was no impairment in 2009.
At 1 January 2010, Pirate sold a depreciable plant asset to Saint for $ 275. The sold plant asset had a cost of $1,000 and an accumulated depreciation of $ 750. This asset is deprecated by Saint using straight line method over its remaining useful life of 5 years including full depreciation in year of purchase.
Full goodwill method is used

Required: Prepare the consolidated Balance Sheet as at 31 December 2010 and make sure to show all calculations and journal entries