Section B: Partly Owned Subsidiary $(25$ marks$)$

$2.$ XL Ltd owns $80\%$ of MN Ltd$.$ The statements of financial position for the two companies as of $31$ March $2019$ are provided below.

Statement of Financial Position as at $31$ March $2019$ XL Ltd $($R$000)$ MN Ltd $($R$000)$

Non$-$Current Assets

Tangible assets at net book value $2,200920$

Investment in MN Ltd $(800,000$ Ord Shares$)3,200-$

Current Assets

Inventory $1,300400$

Accounts Receivables $3,400300$

Cash and bank $25080$

Total Assets $10,3501,700$

Current Liabilities

Accounts Payables $4,100280$

Capital and Reserves

Share capital of R$1$ each $5,0001,000$

Retained Income $1,250420$

Total Equity and Liabilities $10,3501,700$

Additional Information:

$1.$ At $31$ March $2019,$ XL Ltd had inventory purchased from MN Ltd for R$60,000.$ The goods had been invoiced by MN Ltd at cost plus $20\%.$

$2.$ Inter$-$company debts at $31$ March $2019$: XL Ltd owed MN Ltd R$70,000.$

$3.$ A remittance of R$40,000$ from XL Ltd to MN Ltd in March $2019$ was not received by MN Ltd until April $2019.$

a$.$ Prepare the consolidated statement of financial position for XL Ltd and its partly owned subsidiary MN Ltd as of $31$ March $2019.(15$ marks$)$

b$.$ Discuss the impact of the additional information provided $($inventory$,$ inter$-$company debts, and remittance$)$ on the consolidated financial statements. $(10$ marks$)$