The statements of financial positions as at 31 December 2020 of X and its subsidiary entity

Y are summarized below:

The statements of financial positions as at 31 December 2020 of X and its subsidiary

entity Y are summarized below:

X

Y

$

$

$

$

ASSETS

Non-current assets:

Intangible assets

2,000

Property, plant and equipment

29,000

24,800

Investment i n Y

21,000

50,000

26,800

Current assets:

Inventories

12,000

18,000

Trade receivables

24,750

21,000

Trading account with Y

4,000

Interest receivable from Y

250

Bank balance

20,000

61,000

39,000

Total Assets

111,000

65,800

EQUITY and LIABILITIES

Equity:

Ordinary shares of $1 each

40,000

8,000

Retained earnings

21,000

11,000

Total Equity

61,000

19,000

Non-current liabilities:

Interest bearing borrowings

30,000

20,000

Current liabilities:

Trade payables

20,000

18,300

Interest payable

500

Current account with

2000

Bank overdraft

6,000

26,800

111,000

65,800

X acquired 6,000 ordinary shares in Y on 1 January 2017. The price paid was $11,000. The balance on Ys retained earnings at the date of acquisition by X was $5,000. This Included an intangible asset of $1,000 (see note 4 below). Goodwill on consolidation is retained at cost in the group statement of financial position. There has been no evidence of impairment since acquisition. X made a long-term loan of $10,000 to Y on the same date.

On 31 December 2020 there was cash in transit from Y to X of $2,000.

On 31 December 2020 the inventory of Y included $4,800 of goods purchased from X. X had invoiced these goods at cost plus 25%.

The intangible asset of Y does not satisfy the recognition criteria laid down in IAS 38. IAS 38 is to be followed in preparing the consolidated accounts.

It is the groups policy to value non-controlling interests at its proportionate share of the fair value of the subsidiarys identifiable net assets.

Requirement:

Prepare a consolidated statement of financial position for the X group as at 31 December 2020.