Consolidation Practice 1 P acquired 80% of S one year ago when the retained earnings of S were $2,000,000, on this day

P also acquired 50% of the 10% Debentures in S at par. The following information is available relating to the year ended 31 December 2010. Statements of Financial Position as at 31 December 2010 P $'000 Non Current Assets Land and Buildings Plant and Machinery Investments in S Current Assets Inventories Receivables Bank Total Assets 100,000 80,000 40,000 220,000 10,000 18,000 9,000 S $'000 30,000 15,000 45,000 5,000 4,500 1,000 10,500 55,500

37,000 257,000

Equity Share Capital Reserves

120,000 89,000 209,000

30,000 3,500 33,500

Non Current Liabilities 10% Debentures Current Liabilities Payables

12,000

10,000

36,000 257,000

12,000 55,500

Notes: 1. At the date of acquisition a fair value valuation was a carried out, it was determined that the fair value of some of the plant and machinery was $1,000,000 in excess of the historic cost value and the fair value of land and building was $2,000,000 higher than the carrying value. This plant and machinery had 5 years remaining on this date.

2. Throughout the year P sold goods with a sales value of $60,000 to S charging its normal margin of 20%. Half of these goods remained in the inventories of S at the year end. 3. On the last day of the year S sent a cheque for $10,000 as part payment for the transaction above, this was not received by P until the 6th of January 2011. The remaining balance of the inter group sale remains outstanding. 4. On the first day of the year P sold plant and machinery to s for $5,000,000. This had cost P $6,000,000 3 years prior to this transfer, P depreciated this plant and machinery over 8 years. S determined that the remaining UEL of this plant on transfer was 4 years. 5. The fair value of the Non-Controlling Interests at acquisition was $8,000,000.

Required Prepare a consolidated statement of financial position for the P group as at 31 December 2010.