P acquired 75% of the share capital of S on its incorporation.
The Statements of Financial Position of the two entities as at 31
December 2020 are as follows:
P
S
Non-current assets
50,000
25,000
Investment in S, at cost
15,000
Inventory
13,000
7,000
Other current assets
10,000
6,000
88,000
38,000
Share capital - $1 shares
45,000
20,000
Retained earnings
30,000
15,000
Current liabilities
13,000
3,000
88,000
38,000
During December 2020, S had sold goods to P for $6,000. S sells
to P at cost plus 25%. P had not sold any of these goods and all
were therefore included in inventory. Additionally, P had not paid
S for these goods and therefore the sum of $6,000 is included in
P's payables and in S's receivables.
Required: Prepare a Consolidated Statement of
Financial Position at 31 December 2020.
