Reference no: EM132666004

A Limited acquired 70% of shares in B Limited on 01 January 2015 for 165 000. At this date the retained earnings of the subsidiary was 40 000.

At the date of acquisition A Limited considered the net assets of B Ltd to be fairy valued in its statement of financial position, with the exception of land which was considered to be worth 50 000 more than its carrying amount. B Limited did not adjust the value of the land in its books. The non controlling interests are recognized at their share of the net identifiable assets of the subsidiary.

The following are the summarized Statements of Financial Position of A Limited and B Limited as at 31 December 2018:

                                   A LIMITED             B LIMITED

Assets                     2,000,000               200,000

Land at cost                 1,400,000           140,000

Investments in B Ltd        165,000                0

Total current assets            435,000          60,000

Equity and liabilities             2,000,000       200,000

Share capital                      550,000        110,000

Retained earnings                 900,000         70,000

Non current liabilities               550,000        20,000

Required:

Problem 1: Prepare the Consolidated Statement of Financial Position as at 31 December 2018.