Prepare the consolidated statement of financial position of Cellino and its subs

Cellino is one of the biggest coffee chain in US. The cellino coffee chain acquired 80% of the
equity share capital of Viva Italia ,which is a coffee bean supplier company, for $700,000 on 1
September 20X6, when the retained profits of Viva amounted to $60,000. There have been no
movements on Viva’s share capital or share premium account since that date.
At 31 August 20X9 the summary statements of financial position of the two companies were as
follows:
Cellino Viva
$000 $000
Tangible non-current assets 280 490
Investment in Luna 700
Net current assets 130 260
––––– –––––
1,110 750
——— ——
Share capital 600 400
Share premium account 350 200
Retained earnings 160 150
––––– ––––
1,110 750
——— ——
Net current assets include intra-group account balances that have been agreed between Cellino and
Viva. At 31 August 20X9 $27,000 was due from Cellino to Viva.
Viva has some land whose fair value is $20,000 greater than its carrying amount on acquisition.
Non-controlling interest is valued at fair value on acquisition, which was $179,000.
Required:
(a) Prepare the consolidated statement of financial position of Cellino and its subsidiary
as at 31 August 20X9
(b) The following table shows factors to be considered when determining whether a
parent- subsidiary relationship exists.

Factor Description
I. Greater than 50% of equity shares held by investor
II. Ability to control board of directors
III. Participation in policy-making processes
IV. Material transactions between the two entities
V. Interchange of managerial personnel
VI. Non-controlling interest
VII. Provision of essential technical assistance
VIII. 100% of equity shares held by investor
Required:
Which of the above factors I to VIII illustrate the existence of a parent-subsidiary
relationship? Explain all factors whether it illustrate “control” or “significant influence”