The following are the summarised balance sheets of P Ltd and S Ltd at 31 December 20X6.

There were no additions or disposals of fixed assets by the group during the year.

(b) P Limited acquired its holding on 1 January 20X6, when the balance on S Limited’s reserves stood at £50,000. The investment consists of 150,000 ordinary shares of £1 each, fully paid, purchased for £250,000.

(c) P Limited credited to its profit and loss account a dividend of £7,500 from S Limited in March 20X6, in respect of the shares acquired on 1 January 20X6. S Limited does not intend to pay an ordinary dividend for the year ended 31 December 20X6.

Required:

Prepare a consolidated balance sheet for P Limited and its subsidiary S Limited at 31 December 20X6.

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Tangible fixed assets (see Note (a)) Loan to S Ltd Investment in S Ltd Current assets Stocks Debtors Bank Creditors: amounts falling due within one year Trade creditors Proposed preference dividend Total assets less current liabilities Less Long-term liability - Loan from P Ltd Capital and reserves: Ordinary shares of £1 each, fully paid 8% preference shares of £1 each, fully paid Reserves P Limited £ 110,000 100,000 30,000 190,000 £ 320,000 50,000 250,000 240,000 (190,000) 670,000 670,000 500,000 170,000 670,000 £ S Limited 50,000 40,000 10,000 22,000 8,000 £ 360,000 100,000 (30,000) 430,000 (50,000) 380,000 200,000 100,000 80,000 380,000