Consolidated Balance Sheet

1 yes 2 we need to cancel the 2.5m out of parent's financial instrument assets against 2.5m of the subsidiary's financial instrument liabilities If the question is also asking for a consolidated statement of income, then the loan interest received by the parent needs to be cancelled against the same amount of loan interest paid by the subsidiary Ok?

so i just subtract the 2.5 m from the 4m liability of the subsidiary making the sub balance 1.5 m and the add the 2.5m to the parent's asset?

This is the question: On April 1, 2011 Panther acquired 80% of Seal’s equity shares by means of an immediate share exchange and a cash payment of 88 cents per aquired share, deferred until April, 1 2012. Panther has recorded the share exchange, but not the cash consideration. Panther’s cost of capital is 10% per annum. Panther Seal Non- Current Assets PP and E 38 100 000 28 500 000 Investment Seal 24 000 000 Investment Comb 6 000 000 Investment- Loan Note 2 500 000 Investments- Other Equity 2 000 000 Total NCA 72 600 000 28 500 000 Current Assets Inventory 13 900 000 10 400 000 Trade Receivables 11 400 000 5 500 000 Bank 900 000 600 000 Total Current Assets 26 200 000 16 500 000 Total Assets 98 800 000 45 000 000 Equities and Liabilities Ordinary Shares @ $1 each 25 000 000 10 000 000 Share Premium 17 600 000 - Retained Earnings 30 200 000 26 000 000 72 800 000 36 000 000 Non-Current Liabilities 11% Loan Notes 12 000 000 4 000 000 Deferred Tax 4 500 000 - Current Liabilities Trade Payable 9 500 000 5 000 000 98 800 000 45 000 000 From the advise u gave i the 2.5 would be taken from the Investment- Loan Note making it 0. and the 2.5 would also be taken from the loan not of the subsidiary making it 1.5m Therefore this is an inter company transaction and does not affect the net assets. Am i correct?

It's an inra- group balance, not an inter company transaction And nowhere in this last post of yours is there any indication that the 2.5m is a part of the 4m subsidiary loan note liability In fact, if I read your blues and blacks correctly, the 2.5 m appears to be an asset of the subsidiary (it's in black) and what's an investment comb? A high value piece of hairdresser's equipment? Seriously, what do you mean "investment comb"?

Its hw d question was writtin. Comb is an associate.... And Thank you

Ah, Comb is the name of the Associate company! Did we sort out the investment in loan notes of 2.5m, the loan notes of 4m, the possibility / non-applicability of the cancelation? Where are we up to - I don't feel that I have helped you at all!