Rome purchased 75% of Madrid for $2,000,000 ten years ago when the balance on its retained...
Rome purchased 75% of Madrid for $2,000,000 ten years ago when the balance on its retained eamings was $1,044,000. The statements of financial position of the two companies as at 31 March 2017 are: Rome Madrid s000 Non-current assets Investment in Madrid Land and buildings Plant and equipment Motor vehicles 2,000 3,350 1,010 510 2,210 345 6,870 2,555 Current assets Inventories 890 352 Trade receivables 1,372 514 Cash and cash equivalents 2,351 9,221 89 51 917 3,472 Equity Share capital - S1 ordinary shares Retained earnings Revaluation surplus 1,000 500 4,225 2,500 2,610 7,725 3,110 Non-current liabilities 10% debentures 500 Current liabilities Trade payables 996 362 3,472 9,221 The following additional information is available: (1) Included in trade receivables of Rome are amounts owed by Madrid of $75,000. Madrid partly repaid the debt for $39,000, but this amount is still in transit at the year end. (2) Included in the inventories of Madrid are items purchased from Rome during the year for $31,200. Rome marks up its goods by 30% to achieve its selling price. (3) Madrid shares were trading at $4.40 just prior to acquisition by Rome and this price is used to value non- controlling interests Required Prepare the consolidated statement of financial position for the Rome group of companies as at 31 March 2017. It is the group policy to value the non-controlling interests at full (or fair) value.