Page 323 - F3 -FA Integrated Workbook STUDENT 2018-19

Consolidated financial statements I

Example 2 cont.

The following information is also relevant:

(i) Hide acquired 80% of the ordinary shares of Seek for $300,000 on
1 January 20X1. At the acquisition date, the retained earnings of Seek
were $129,000. The fair value of the non-controlling interest at the date
of acquisition was $50,000.

(ii) The fair values of the net assets of Seek at the acquisition date
approximated their carrying amounts, with the exception of a plot of
land. This land was held in the financial statements of Seek at its cost of
$145,000 but was estimated to have a fair value of $177,000. This land
was still owned by Seek at 31 December 20X5.

(iii) During the year ended 31 December 20X5, Hide sold goods to Seek for
$25,000 making a gross profit margin on the sale of 30%. At the
reporting date, one third of these goods remained unsold in the
inventories of Seek.

(iv) At the reporting date, Hide had a receivable due from Seek for $2,000,
and Seek had a payable due to Hide for the same amount.

Required:

Prepare the consolidated statement of financial position for the Hide
Group as at 31 December 20X5.

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