• The following balances are presented for Rock Ltd, Stone Ltd and Cold Ltd:
  Rock N$ Stone N$ Cold N$
  Profit for period (450 000) (900 000) (720 000)
  Inventories 900 000 460 000 700 000
  Trade receivables 724 857 697 714 603 571
  Cash and Cash equivalents 1 033 000 412 000
  Investment in Stone Ltd -60 000 ordinary shares @ fair value 1 800 000 - -
  Investment in Cold Ltd -40 000 ordinary shares at fair value - 1 600 000 -
  Land 1 419 000 2 400 000 1 000 000
  Plant @ Cost 1 228 000 1 420 000 618 000
  Provisional tax payments 412 000 196 000 158 000
  Retained earnings 01/07/18 (6 000 000) (4 805 000) (2 113 000)
  Deferred tax (48 000) (62 000) (24 000)
  Provision for tax (192 857) (385 714) (308 571)
  Share capital-100 000 ordinary shares (100 000) - -
  Share capital-50 000 ordinary shares - - (50 000)
  Share capital-75 000 ordinary shares - (150 000)
  Accumulated depreciation-Plant (221 040) (170400) (37 080)
  Trade payables (504 960) (280 600) (238 920)
  Short term borrowing-Bank Overdraft - (20 000)
  Relevant Information:
  Note 1
  On 1 July 2016 Rock Ltd purchased 60 000 shares in Stone Ltd for N$1 800 000. On the same day Stone Ltd purchased 40 000 ordinary shares in Cold Ltd and paid N$1 600 000 for the investment. Rock Ltd has controlled Stone Ltd and Stone Ltd has controlled Cold Ltd since 1 July 2016
  Note 2
  On 1 July 2016 the following information was applicable
  Stone Cold
  Retained earnings N$1 500 000 N$1 200 000
  Page 12 of 23
  Note 3
  On 1 July 2016 Stone Ltd valued Cold Ltd ‘s Land at N$1 600 000. The revaluation was not recorded in the books of Cold Ltd. The fair values of the remaining assets, liabilities and contingent liabilities of Stone Ltd and Cold Ltd on 1 July 2016 were considered to be equal to the carrying amounts of these items.
  Note 4
  During the year Rock Ltd sold inventory to Cold Ltd at a profit of 50% on cost price. On 30 June 2019 Cold Ltd had inventories on hand that were purchased from Rock Ltd for N$300 000.
  Note 5
  During the current year Cold Ltd sold inventory to Stone Ltd at a profit of 331/3% on cost price. On 30 June 2019 Stone Ltd had inventories on hand that were purchased from Cold Ltd for N$100 000.
  Note 6
  Included in trade receivables of Rock Ltd is a loan of N$15 000 to Cold Ltd. The loan is included in the trade payables of Cold Ltd.
  Note 7
  The group uses the partial goodwill method to recognize goodwill. (The NCI are recognized at their proportionate share of the acquiree’s net identifiable assets)
  Note 8
  The goodwill that arose on the acquisition of Stone Ltd was considered to be impaired by N$200 000.
  Note 9
  Assume a normal tax rate of 28%.
  Note 10
  The fair value of the equity investments is equal to the cost price thereof. The equity investments are measured at fair value through other comprehensive income (FVTOCI)
  Note 11
  Each share carries 1 vote.
  Required:
  1.1
  Prepare the Consolidated Statement of financial position of Rock Ltd Group. on 30 June 2019.
  

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11 The Consolidated Statement of financial position of Rock ... View the full answer