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Question 1 (25)

Tables Plc acquired 75% of the issued share capital and voting rights of Cellular Ltd on 1 November 2018 for P4,740,000. At that date Cellular Ltd had issued share capital of P2,500,000, share premium of P1,000,000 and retained earnings of P180,000.

Extracts of the statements of financial position for the two companies one year later at 31 October 2019 are as follows:

Tables Plc Cellular Ltd

P'000 P'000

ASSETS

Non-current assets

Investment in Cellular Ltd 4,990

Property, plant and equipment 4,515 4,384

9,505 4,384

Current assets 2,656 1,990

Total assets 12,161 6,374

EQUITY AND LIABILITIES

Equity

Share capital 5,200 2,500

Share premium 2,800 1,000

Retained earnings 2,856 276

Total equity 10,856 3,776

Non-current liabilities 720 1,440

Current liabilities 585 1,158

Total liabilities 1,305 2,598

Total equity and liabilities 12,161 6,374

Additional data:

1. At 1 November 2018 the fair value of the non-current assets of Cellular Ltd was P600,000 more than the book value. This revaluation has not been recorded in the books of Cellular Ltd (ignore any effect on the depreciation for the year).
2. On 1 August 2019, Tables Plc made an interest free long-term loan of P250,000 to Cellular Ltd, and classified it as part of its investment in Cellular Ltd. Cellular Ltd has classified the loan as a non-current liability in its financial statements. No loan repayment has yet been made.
3. The directors of Tables Plc have concluded that goodwill has been impaired by P160,000 during the year.
4. Tables Plc has decided non-controlling interest will be valued at their proportionate share of net assets.

Draft the consolidated statement of financial position for Tables Plc and its subsidiary undertaking as at 31 October 2019.

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