The following are individual statements of financial position as at 31 March 2020 of Universe plc and its subsidiary Galaxy plc:
|Universe plc Galaxy plc|
|Property, plant and equipment||968,750||512,500|
|Investment in Galaxy||472,500||–|
|Current account with Galaxy||45,000||–|
|Cash and cash equivalents||20,790||15,975|
|Equity and Liabilities|
|Ordinary shares £1 each||800,000||350,000|
|Current account with Universe||–||45,000|
|Other current liabilities||294,600||22,310|
|Total equity and liabilities||1,759,490||674,500|
The following information is relevant:
- Universe plc acquired 280,000,000 ordinary shares in Galaxy plc for £472,500,000 on 1 April 2019. At the date of acquisition, the ordinary shares and the retained earnings of Galaxy plc were £350,000,000 and £108,500,000 respectively.
- On 1 April 2019, a fair value exercise was carried out and it was determined that the fair value of Galaxy plc’s property, plant and equipment was £50,000,000 greater than their carrying values. These assets had remaining useful economic lives of 8 years on 1 April 2019. The group policy is to charge straight-line depreciation on the property, plant and equipment with no residual value. Galaxy plc has not adjusted its accounts to reflect the fair value exercise.
- During the year ended 31 March 2020, Universe plc sold goods to Galaxy plc for £45,000,000 at a mark-up of 20% on cost. 75% of these goods remained in Galaxy plc’s inventory on 31 March 2020.
- The impairment test showed that the goodwill arising on the acquisition of Galaxy plc was impaired by £12,000,000 on 31 March 2020.
- It is group policy to value the non-controlling interest at fair value at the date of acquisition.
- The fair value of the non-controlling interest in Galaxy plc at the date of acquisition was £125,000,000.
Prepare the consolidated statement of financial position for the Universe group as at 31 March 2020.
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