1. Summer plc acquired 60% of the common shares of Winter Ltd on 30 September 20X1 and gained control. At the date of acquisition, the balances on the reserves were as follows:
Additional paid-in capital – £20,000
Retained earnings – £35,000
At 31 December 20X1 the balance sheets of the two companies were as follows:
Summer Winter
£000 £000
ASSETS
Non-current assets
Property, plant and equipment 200 200
Investment in Winter 141
Current assets 100 140
Total assets 441 340
EQUITY AND LIABILITIES
Common £5 shares 175 160
Additional paid-in capital 25 20
Retained earnings 161 40
361 220
Current liabilities 80 120
Total equity and liabilities 441 340
Notes:
1. The fair value is the same as the book value.
2. There have been no movements on share capital since 30/9/20X1.
3. 8.33% of the goodwill is to be written off as an impairment loss.
Required:
Prepare a consolidated balance sheet for summer plc as at 31 December 20X1
Notes:1The fair value of the non-controlling interest at the date of acquisition was £92,000. The non-controlling interest is to be measured using method 2. The fair values of the identi?able net assetsof Winter at the date of acquisition were the same as their book values..2There have been no movements on share capital since 30/9/20X1.316.67% of the goodwill is to be written off as an impairment loss.Required:Prepare a consolidated statement of ?nancial position for Summer plc as at 31 December 20X1