Solution-Prepare the Consolidated Statement of Financial

Prepare the Consolidated Statement of Financial Position

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Reference no: EM132716988

Question - H Limited acquired 70% of shares in S Limited on 01 January 2016 for R165 000. At this date the retained earnings of the subsidiary was R40 000.

At the date of acquisition H Limited considered the net assets of S Ltd to be fairly valued in its statement of financial position, with the exception of land which was considered to be worth R50 000 more than its carrying amount. S Limited did not adjust the value of the land in its books. The non-controlling interests are recognised at their share of the net identifiable assets of the subsidiary.

The following are the summarised Statements of Financial Position of H Limited and S Limited as at 31 December 2019:

	H Limited	S Limited
Assets	2,000,000	200000
Land at cost	1,400,000	140,000
Investment in S 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 - Prepare the Consolidated Statement of Financial Position as at 31 December 2019. Note: Students are required to show at acquisition journal entries and analysis of shareholding.

Reference no: EM132716988

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Prepare the Consolidated Statement of Financial Position

Reference no: EM132716988

Reference no: EM132716988

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