The balance sheets of A and B as at 31 December 20X7 are as shown in Figure 14.8.
In addition:

a. A had acquired 37,500 shares in B in 20X3 when there was a debit balance on  the reserves of :3,000.

b. B purchases goods from A, providing A with a gross profit on the invoice price of 33 per cent. On 31 December 20X7 the inventory of B still included an amount of :8,000, being goods purchased from A for :9,000.
Prepare the consolidated balance sheet of A and its subsidiary as at 31 December 20X7.

Transcribed Image Text:

Figure 14.8 Balance sheets for A and B as at 31 December 20X7 A 000s B 000s Land and buildings 108 64 less Depreciation 20 88 32 32 Plant and machinery 65 43 less Depreciation 25 40 29 128 444 14 46 Investment: shares in B 45 T Inventory 25 27 Receivables 48 21 Bank 12 6 85 54 Payables (current) 112 (27) 34 20 146 66 Ordinary 1 shares 100 50 Share premium 10 Reserves 36 146 16 66