Question & Answer: The summarized statements of financial position of Close and Steele as at December 31, 2012 were as follows:…..

The summarized statements of financial position of Close and Steele as at December 31, 2012 were as follows:

Close                                                    Steele

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$                                                             $

Assets

Non-current assets

Tangible assets                                                                84,000                                                 58,200

Investments                                                                     80,000

Current assets

Current accounts – Close                                                                                                            3,200

Cash at bank                                                                     10,000                                                    3,000

Investments                                                                                                                                    2,500

Trade receivables                                                           62,700                                                    21,100

Inventory                                                                       18,000                                                    12,000

         Total                              254,700                                           100,000

Equity and Liabilities

Trade payables                                                                35,000                                                   11,000

Current account – Steele                                              2,700                                                 –

Called up share capital ($1 ordinary shares)          120,000                               60,000

Share premium account                                                       18,000

Revaluation surplus on January 1, 2012                   23,000                                                  16,000

Retained earnings on January 1, 2012                  40,000                                                  8,000

Profit for 2012                                                               16,000                                                  5,000

Total                                            254,700                                  100,000

Additional information

(1)   On December 31, 2011, Close acquired 48,000 shares in Steele for $80,000 cash.

(2)   The inventory of Close includes $4,000 goods from Steele invoiced to Close at cost plus 25%.

(3)   A payment for $500 by Close to Steele, sent before December 31, 2012, was not received by Steel until January 2013.

(4)   Goodwill has been impaired by $7,800 since the acquisition took place.

(5)   Non-controlling interest is valued at the proportionate share of the subsidiary’s identifiable net assets; it is not credited with its share of goodwill.

Required:

Prepare the consolidated statement of financial position of Close and its subsidiary Steele as at December 31, 2012.

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