Prepare a consolidated statement of financial position

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Reference no: EM132837555

Problem - On 1 January 2014 Parent plc acquired 100% of the equity shares in Subsid plc for $72,000 to gain control. The retained earnings of the Subsid plc at 1 January 2014 were $9,600. The fair value of the land in Subsid plc was $3,000 above book value.

During the year Parent plc sold some of its inventory to Subsid plc for £8,400, which represented cost plus a mark-up of 40%. Some of these goods, 80%, are still in the inventory of Subsid plc at 31 December 2014.

The statements of financial position of the two companies as at 31 December 2014 are shown below.

	Parent plc	Subsid plc
Non-Current Assets	50,000	63,000
Investment in Subsid plc	72,000
Current Assets
Inventories	3,800	9,600
Parent Current Account	19,200
Other Current Assets	9,600	32,400
Current Liabilities
Subsid. Current Account		19,200
Other Current Liabilities	25,000	15,000
Net Current Assets	7,600	7,800
Net Assets	129,600	70,800
Equity
Share Capital	57,600	50,400
Retained Earnings	72,000	20,400
	129,600	70,800

Required - Prepare a consolidated statement of financial position for Parent plc as at 31 December 2014.

Reference no: EM132837555

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