Highway Ltd bought 80% of the share capital in Sideway Ltd for £260,000, some time ago when reserves in Sideway were £40,000. At acquisition the non-current assets of Sideway were actually worth £160,000, and the inventory was worth £80,000. The statements of financial position for the two companies, before the adjustments to the €˜fair values€™ of Sideway€™s non-current assets and inventory have been dealt with, are set out below.

Prepare the consolidated statement of financial position.

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HIGHWAY LTD. Investment in S 260,000 Share capital 280,000 40,000 Reserves Inventory 40,000 Bank 20,000 320,000 320,000 SIDEWAY LTD. 100,000 Share capital 200,000 Non-current assets Inventory 100,000 Reserves - pre 40,000 - post Bank 60,000 20,000 260,000 260,000