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 €):
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Invigilator
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Lemma
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Assets Intangible assets
|
|
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2 000
|
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Property, plant and equipment (net)
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490 000
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80 000
|
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Investment in Lemma
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600 000
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|
-
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Inventories
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230 000
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360 000
|
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Trade and other receivables
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400 000
|
|
240 000
|
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Total assets
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1 720 000
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|
682 000
|
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Financing
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|
|
|
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Share capital
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1 000 000
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200 000
|
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Retained earnings
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140 000
|
|
100 000
|
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Provisions
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20 000
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30 000
|
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Current liabilities
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560 000
|
|
352 000
|
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Total equity and liabilities
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1 720 000
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682 000
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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).
(c) The fair value of Lemma's inventories amounts to €320 000.
(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).