X plc acquired 80 per cent of the ordinary share capital of Y plc on 1 January 20X6 for £300,000.

The lists of balances of the two companies at 31 December 20X6 were as follows:

(a) A remittance of £2,000 from Y plc to X plc in December 20X6 was not received by X plc until January 20X7.

(b) Goods, with an invoice value of £3,000, were despatched by X plc in December 20X6 but not received by Y plc until January 20X7. The profit element included in this amount was £400.

(c) Included in the stock of Y plc at 31 December 20X6 were goods purchased from X plc for £10,000. The profit element included in this amount was £2,000.

(d) It is group policy to exclude all profit on any intra-company transactions.

(e) No interim dividend was paid in 20X6 by either company.

(f) Goodwill is not amortised.

Required:

Prepare a consolidated balance sheet for X plc and its subsidiary Y plc as at 31 December 20X6.

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Called-up share capital: 400,000 ordinary shares of £1 each, fully paid 300,000 ordinary shares of £0.50 each, fully paid Reserves as at 1 January 20X6 Retained profits for 20X6 Trade creditors Taxation Proposed final dividend Depreciation provisions: Freehold property Plant and machinery Current account Tangible fixed assets: Freehold property, at cost Plant and machinery, at cost Investment in Y plc Stocks Debtors Bank Current account X plc £000 400 220 20 130 30 20 12 40 872 120 183 300 80 160 10 19 872 Y plc £000 150 90 18 80 14 10 6 12 14 394 160 62 70 90 12 394