The statements of financial position of Hold Ltd and Sub Ltd as at 31 December 2019 were summarized as follows: Hold Ltd Sub Ltd 11,400 Investment in Sub Ltd (3,200 shares) Fixed assets (NBV) Loans to Sub Ltd Inventories Account receivable Current account with Sub Ltd Prepayment Cash at bank 4,740 13,900 700 3,100 3,800 1,500 300 400 28,440 2,000 800 1,100 100 15,400 5,000 5,000 500 17,300 Ordinary shares @$1 Capital reserves Retained profit Current account with Hold Ltd 10% Loan payable Account payable 200 4,000 1,200 1,000 4,000 15,400 5,640 28,440 Additional information: 1. Hold Ltd acquired 80% of ordinary shares of Sub Ltd on 1 July 2016 when the retained loss and capital reserves of Sub Ltd amounted to $400 and $1,200 respectively. 2. During the year 2018, Sub Ltd made a bonus share of 1 for every 4 shares held by the shareholders out of the pre-acquisition capital reserves. Sub Ltd has duly recorded the transaction in its book and accounts. However, Hold Ltd has not updated any record in respect of the bonus shares received. 3. During the year, Sub Ltd sold merchandises amounting to $7,500 to Hold Ltd, of which 10% of merchandises were still kept in Hold Ltd on 31 December 2019. The merchandises were marked up by 25%. 4. A remittance of $300 was made from Hold Ltd on 29 December 2019 to Sub Ltd, which received it on 2 January 2020. The cash transfer will be recorded as a movement of current account. Adjustment for it can be made in Hold Ltd or in Sub Ltd. 5. On 1 July 2016, the fair value of fixed assets of Sub Ltd exceeded the carrying amount of those assets by $500. Sub Ltd has not recorded such adjustment in its own book and record. The remaining useful life remained unchanged at 5 years with depreciation on a straight-line basis. The book value of other net assets at the date of acquisition was equal to the fair value of those net assets. 6. During the year, Sub Ltd paid $100 dividend out of the profit earned for 2018. Hold Ltd had received the dividend and the bookkeeper recorded this dividend as a reduction of investment cost. 7. In Sub Ltd, the loan was made on the first date of the financial year of 2019 and 70% of the loan was borrowed from Hold Ltd and the rest was from external parties. Sub Ltd has neither paid nor recorded the interest expense for the year 2019. However, Hold Ltd has accrued the interest income from Sub Ltd., which was grouped in Other revenue and Account receivable respectively. 8. The fair value of non-controlling interest was at $1,110 as at 1 July 2016. 9. It was estimated that the goodwill should be impaired by $200 since its acquisition. Required: (a) Prepare the journal for the consolidated statement of financial position of Hold Ltd and its subsidiary for the year ended 31 December 2019. (42 marks) (b) Using the consolidation worksheet provided separately, show how you come up with the figures for each item in the consolidated statement of financial position of Hold Ltd and its subsidiary as at 31 December 2019. (20marks) (c) Extract the Equity section from the consolidated statement of financial position of Hold Ltd and its subsidiary as at 31 December 2019 showing the equity attributable to the parent company. What is the amount of net assets controlled by the parent company? (6 marks) The statements of financial position of Hold Ltd and Sub Ltd as at 31 December 2019 were summarized as follows: Hold Ltd Sub Ltd 11,400 Investment in Sub Ltd (3,200 shares) Fixed assets (NBV) Loans to Sub Ltd Inventories Account receivable Current account with Sub Ltd Prepayment Cash at bank 4,740 13,900 700 3,100 3,800 1,500 300 400 28,440 2,000 800 1,100 100 15,400 5,000 5,000 500 17,300 Ordinary shares @$1 Capital reserves Retained profit Current account with Hold Ltd 10% Loan payable Account payable 200 4,000 1,200 1,000 4,000 15,400 5,640 28,440 Additional information: 1. Hold Ltd acquired 80% of ordinary shares of Sub Ltd on 1 July 2016 when the retained loss and capital reserves of Sub Ltd amounted to $400 and $1,200 respectively. 2. During the year 2018, Sub Ltd made a bonus share of 1 for every 4 shares held by the shareholders out of the pre-acquisition capital reserves. Sub Ltd has duly recorded the transaction in its book and accounts. However, Hold Ltd has not updated any record in respect of the bonus shares received. 3. During the year, Sub Ltd sold merchandises amounting to $7,500 to Hold Ltd, of which 10% of merchandises were still kept in Hold Ltd on 31 December 2019. The merchandises were marked up by 25%. 4. A remittance of $300 was made from Hold Ltd on 29 December 2019 to Sub Ltd, which received it on 2 January 2020. The cash transfer will be recorded as a movement of current account. Adjustment for it can be made in Hold Ltd or in Sub Ltd. 5. On 1 July 2016, the fair value of fixed assets of Sub Ltd exceeded the carrying amount of those assets by $500. Sub Ltd has not recorded such adjustment in its own book and record. The remaining useful life remained unchanged at 5 years with depreciation on a straight-line basis. The book value of other net assets at the date of acquisition was equal to the fair value of those net assets. 6. During the year, Sub Ltd paid $100 dividend out of the profit earned for 2018. Hold Ltd had received the dividend and the bookkeeper recorded this dividend as a reduction of investment cost. 7. In Sub Ltd, the loan was made on the first date of the financial year of 2019 and 70% of the loan was borrowed from Hold Ltd and the rest was from external parties. Sub Ltd has neither paid nor recorded the interest expense for the year 2019. However, Hold Ltd has accrued the interest income from Sub Ltd., which was grouped in Other revenue and Account receivable respectively. 8. The fair value of non-controlling interest was at $1,110 as at 1 July 2016. 9. It was estimated that the goodwill should be impaired by $200 since its acquisition. Required: (a) Prepare the journal for the consolidated statement of financial position of Hold Ltd and its subsidiary for the year ended 31 December 2019. (42 marks) (b) Using the consolidation worksheet provided separately, show how you come up with the figures for each item in the consolidated statement of financial position of Hold Ltd and its subsidiary as at 31 December 2019. (20marks) (c) Extract the Equity section from the consolidated statement of financial position of Hold Ltd and its subsidiary as at 31 December 2019 showing the equity attributable to the parent company. What is the amount of net assets controlled by the parent company? (6 marks)