Statements of financial position

Reference no: EM131005049

On 1 January 20X5 Invigilator Enterprises acquired 100 per cent of the shares of Lemma Company.

The separate condensed statements of financial position immediately after the acquisition appeared as shown below (all amounts in €):

	*Invigilator*	*Lemma*
*Assets* Intangible assets		2 000
Property, plant and equipment (net)	490 000	80 000
Investment in Lemma	600 000	-
Inventories	230 000	360 000
Trade and other receivables	400 000	240 000
Total assets	1 720 000	682 000
*Financing*
Share capital	1 000 000	200 000
Retained earnings	140 000	100 000
Provisions	20 000	30 000
Current liabilities	560 000	352 000
Total equity and liabilities	1 720 000	682 000

Additional information (at acquisition date):

(a) Lemma owns a patent for the production of a new product. Lemma did not recognize the patent in its financial statements. The estimated fair value of the patent amounts to €80 000.

(b) The fair value of Lemma's main corporate offices is €130 000 (net book value of €50 000).

(d) On 1 January 20X5, Invigilator Enterprises still has to pay an invoice (€100 000) for services rendered by Lemma Company in December 20X4.

Required:

(a) Prepare the consolidated statement of financial position of the Invigilator Group as at 1 January 20X5.

(b) Prepare the consolidated statement of financial position of the Invigilator Group as at 1 January 20X5, assuming that the invest- ment in Lemma represents only 90 per cent of the outstanding shares of Lemma Company (apply the partial goodwill method).

Reference no: EM131005049

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