Pot acquired 75% of Siv’s equity shares on 1^st January 2019. The consideration for this purchase was £300,000 cash. On the 1^st January 2019, Siv shares had a market price of £4.20. On the same date, Pot purchased 15,000 shares in Ale, paying £11 cash for every share bought.

 

Siv had suffered retained losses during 2019 of £48,000. Ale had made retained earnings of £35,000 during the same period.

 

Below are the summarised statements of financial position of the companies at 31^st December 2019:

                                                            Pot                      Siv                       Ale

                                                         £’000                   £’000                    £’000

Non-current assets                                                                                           

Property, plant and Equipment      260                      230                       180

Investments                                        610                      150                         nil

Loan receivable                                  100                        nil                         nil

                                                            970                      380                       180

Current assets

Inventory                                               70                        64                         55

Cash and Bank                                   120                      110                       115

 

Total Assets                                     1,160                      554                       350

 

Equity and Liabilities

Equity shares of £1 each                    420                      100                         50

Retained Earnings                              280                      154                       160

                                                            700                      254                       210

Non–current liabilities

8% Loan notes                                    340                      100                         nil

 

Current Liabilities

Trade payables                                     74                        70                         60

Current tax                                            46                      130                         80

 

Total equity and liabilities                1,160                      554                       350

 

The following information is relevant:

 

The fair value of an item of Plant in Siv was £50,000 greater than its book value on 1^st January 2019. This Plant is being depreciated at 10% per annum on a straight line basis.

 

During 2019, Siv charged Pot £84,000 for goods supplied during the year at a mark up of 20%. Pot had paid in full for these goods before 31^st December 2019 but had only sold half of these goods to its own customers.

 

Siv obtained a £100,000 loan from Pot on 30^th December 2019.

 

Pot’s policy is to value non-controlling interests at their fair value at acquisition. An impairment test on 31^st December 2019 showed that the value of the investment in Ale had been impaired by £3,000 and for Siv, an impairment of £8,000 had occurred to the consolidated goodwill.

 

Required:

 

 Prepare the consolidated statement of financial position of Pot as at 31^st December 2019.