On 1 January 20X0 Walpole Ltd acquired 90% of the ordinary shares of a French subsidiary Paris SA. At that date the balance on the retained earnings of Paris SA was A10,000. The non-controlling interest in Paris was measured using method 1. No shares have been issued by Paris since acquisition. The summarized statements of comprehensive income and statements of financial position of Walpole Ltd and Paris SA at 31 December 20X2 were as follows:
Statements of comprehensive income for the year ended 31 December 20X2
|
Walpole Ltd |
Paris SA |
|
|
£000 |
B000 |
|
|
Sales |
317,200 |
200,000 |
|
Opening inventories |
50,000 |
22,000 |
|
Purchases |
180,000 |
90,000 |
|
Closing inventories |
60,000 |
12,000 |
|
Cost of sales |
170,000 |
100,000 |
|
Gross profit |
147,200 |
100,000 |
|
Dividend received from Paris SA |
1,800 |
NIL |
|
Depreciation |
30,000 |
30,000 |
|
Other expenses |
15,000 |
7,000 |
|
Interest paid |
6,000 |
3,000 |
|
Total expenses |
51,000 |
40,000 |
|
Profit before taxation |
98,000 |
60,000 |
|
Taxation |
21,000 |
15,000 |
|
Profit after taxation |
77,000 |
45,000 |
|
Dividend paid |
20,000 |
10,000 |
Statement of financial position as at 31 December 20X2
|
£000 |
B000 |
|
|
Non-current assets |
94,950 |
150,000 |
|
Investment in Paris SA |
41,050 |
|
|
Current assets: |
||
|
Inventories |
60,000 |
12,000 |
|
Trade receivables |
59,600 |
40,000 |
|
Paris SA |
2,400 |
|
|
Cash |
11,000 |
11,000 |
|
Total current assets |
133,000 |
63,000 |
|
Current liabilities: |
||
|
Trade payables |
45,000 |
18,000 |
|
Walpole Ltd |
12,000 |
|
|
Taxation |
21,000 |
15,000 |
|
Total current liabilities |
66,000 |
45,000 |
|
Debentures |
40,000 |
10,000 |
|
Total assets less liabilities |
163,000 |
158,000 |
|
Share capital |
80,000 |
60,000 |
|
Share premium |
6,000 |
20,000 |
|
Revaluation reserve |
10,000 |
12,000 |
|
Retained earnings |
67,000 |
66,000 |
|
163,000 |
158,000 |
|
At 1 January 20X0 |
£1 = A2 |
|
Average for the year ending 31 December 20X2 |
£1 = A4 |
|
At 31 December 20X1/1 January 20X2 |
£1 = A3 |
|
At 31 December 20X2 |
£1 = A5 |
The following information is also available:
(i) The revaluation reserve in Paris SA arose from the revaluation of non-current assets on 11/1/20X2.
(ii) No impairment of goodwill has occurred since acquisition.
(iii) Exchange rates were as follows:
Required:
Assuming that the functional currency of Paris SA is the euro, prepare the consolidated accounts for the Walpole group at 31 December 20X2.