Pink acquired 80% of the share capital of Blue on 1 April 2019. The retained earnings...

Pink acquired 80% of the share capital of Blue on 1 April 2019. The retained earnings of Blue on 30 Sept 2018 were £135,000. No dividends paid by Blue in the year to 30 Sept 2019.

The fair value of the 20% non-controlling interest at acquisition was £200,000.

At acquisition the fair value of Blue's plant exceeded its carrying amount by £200,000. Plants are depreciated at 20% rate (straight line method).

Goodwill should be written down by £20,000 of its original value to allow for impairment.

Below are the statements of financial position of as at 30 Sept 2019.

	Pink	Blue
Assets	£'000	£'000
Non-current assets
Property, plant and equipment	2300	400
Investment in Blue at cost	1000
	3300	400
Current assets
Inventory	300	200
Receivables	300	200
Cash	300	100
	900	500
Total assets	4200	900

Equity
Share capital	1000	475
Retained earnings	2750	275
	3750	750
Liabilities
Current liabilities	450	150
Total equity and liabilities	4200	900

Prepare the consolidated statement of financial position of Pink Group as at 30 September 2019, assuming the group uses the fair value method to account for non-controlling interest.

Include all relevant workings

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ekkarill92 answered 1 year ago

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