Thomas Group You have been asked to assist in the preparation of the consolidated accounts of the Thomas group. Set out below are the statements of financial position of Thomas Co and James Co for the year ended 30 September 2018. STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2018 Thomas James Co '000 '000 Assets Non-current assets Property, plant and equipment Investment in James Co 3,410 13,022 3,760 16,782 3,410 Current assets Inventories Trade receivables Cash 6,682 5,526 273 12,481 29,263 2,020 852 58 2,930 6,340 Total assets Equity and liabilities Equity Share capital Share premium Retained earnings 5,000 2,500 8,942 16,442 1,000 400 2,760 4,160 Non-current liabilities Long term loan 8,000 1,500 Current liabilities Trade payables Income tax payable 3,987 834 4,821 12,821 29,263 507 173 680 2,180 6,340 Total liabilities Total equity and liabilities You have been given the following information: a) The share capital of both Thomas Co and James Co consists of ordinary shares of 1 each. There have been no changes to the balances during the year. b) Thomas Co acquired 800,000 shares in James Co on 30 September 2015 at a cost of 3,760,000. c) At 30 September 2015 the balance on the retained earnings of James Co was 2,000,000. d) It is group policy to value non-controlling interest at the proportionate share of the fair value of the net assets at acquisition. At the year end the directors conclude that goodwill is impaired by 10%. e) During the year Thomas bought goods from James for 20,000 and the profit margin on these goods was 30%. At the year-end Thomas still had half of these goods left and had not paid James for the goods. Required a) Prepare a consolidated statement of financial position for Thomas Co and its subsidiaries as at 30 September 2018. (17 marks) b) Explain why unrealised profits on intragroup transactions are eliminated in consolidated financial statements. (3 marks) Total 20 marks