As at $30$ September $2020,$ the Statements of Financial Position of the two companies in $$The Small Print group$,$ Terms plc and Conditions plc$,$ were as given below.

Terms plc

Conditions plc

$$

$$

Assets

Non$-$current assets

Property, Plant and Equipment

$2,975,000$

$2,016,000$

Investments $($at cost$)$

$1,029,000$

$91,000$

$4,004,000$

$2,107,000$

Current Assets

Inventory

$616,000$

$511,000$

Receivables

$1,029,000$

$742,000$

Other current assets

$259,000$

$154,000$

Cash

$252,000$

$105,000$

$2,156,000$

$1,512,000$

Total Assets

$6,160,000$

$3,619,000$

Shareholders$$ Equity

Ordinary Share Capital $(1$ shares$)$

$2,100,000$

$1,050,000$

$10\%$ Preference shares $(1$ shares$)$

$-$

$315,000$

Retained Earnings

$1,099,000$

$630,000$

$3,199,000$

$1,995,000$

Liabilities

Non$-$current liabilities

$1,050,000$

$574,000$

Current Liabilities

Payables

$1,288,000$

$392,000$

Current tax payable

$623,000$

$483,000$

Bank overdraft

$-$

$175,000$

$1,911,000$

$1,050,000$

Total Liabilities

$2,961,000$

$1,624,000$

Total Equity and Liabilities

$6,160,000$

$3,619,000$

Other information

$$ Each ordinary share of Conditions plc carries one vote and there are no other shares of the company having voting rights.

 

 $$ On $1$ October $2018$ Terms plc paid $840,000$ to purchase $630,000$ ordinary shares of conditiions $$  plc$.$ At that date, the Retained Earnings of Conditions plc were $210,000.$ It was agreed that the assets and liabilities of Conditions plc were shown at fair value in its financial state$$ments at that date. 

 

$$ Since acquisition there has been an impairment of the goodwill arising on consolidation of $210,000.$

$$ During the year ended $30$ September $2020,$ Terms plc sold inventory to Conditions plc for $175,000.$ The profit margin on these sales was $40\%.$ In that same year, Conditions plc resold $80\%$ of that inventory. At $30$ September $2020,$ Conditions plc had unpaid invoices totalling $126,000$ payable to Terms plc for the inventory purchased from it$.$

REQUIRED:

Prepare a consolidated Statement of Financial Position for $$The Small Print group$$ as at $30$ September $2020.$ In producing the Statement, provide clear, detailed workings and explain carefully the purpose of each calculation undertaken and why you have used each of the fig$-$ures in the calculation.

Answer rating: 100% (QA)

Consolidated Statement of Financial Position for The Small Print Group as at 30 September 2020 Purpose This statement combines the financial positions ... View the full answer