Reference no: EM13576173

On 1 July 2010 Anderson Ltd acquires 70 percent of the equity capital of Arthur Ltd at a cost of $4 million. At the date of acquisition all assets of Arthur are fairly stated and the total shareholder funds of Arthur Ltd are $4.4 million consisting of:

	$
Share Capital	3 000 000
Retained Earnings	1 400 000
	4 400 000

As at 30 June 2012 the financial statements of the two companies are as follows:

	Anderson Ltd	Arthur Ltd
	($ 000)	($ 000)
Detailed reconciliation of opening and closing retained earnings
Sales Revenue	800	200
Cost of Goods Sold	(200)	(80)
Other Expenses	(120)	(60)
Other Revenue	310	85
Profit	790	145
Tax	170	35
Profit After Tax	620	110
Retained Earnings - 30 June 2011	2 000	1 600
	2 620	1 710
Dividends Paid	(400)	(80)
Retained Earnings - 30 June 2012	2 220	1 630
Statement of Financial Position
Shareholders Equity
Retained Earnings	2 220	1 630
Share Capital	8 000	3 000
Current Liabilities
Accounts Payable	120	80
Non-current Liabilities
Loans	1 200	500
	11 540	5 210
Current Assets
Cash	300	50
Accounts Receivable	500	350
Inventory	1 000	600
Non-current Assets
Land	2 800	2 210
Plant	2 940	2 000
Investment in Arthur Ltd	4 000	-
	11 540	5 210

Additional Information

• The Management of Anderson Ltd measures any non-controlling interest in Arthur Ltd at fair value.
• During the 2012 financial year Arthur Ltd sells $45 000 of inventory to Anderson Ltd. At year end Anderson has sold this inventory.
• The tax rate is 30 percent.

Required: Showing all workings, including a consolidation worksheet and journal entries, prepare the consolidated statement of financial position, consolidated statement of comprehensive income and consolidated statement of changes in equity for Anderson Ltd and its controlled entity.