2 37 Marks You are the financial director of Pionier Ltd ("Pionier"), the parent company of the Pionier group that mainly provides security door sales and installation services across the country. Pionier's reporting period ends on 31 December. The reporting date for any subsidiary within the group is 31 December. Extract of the trial balances of the group's companies is listed below: Extract of the statement of changes in equity of the group's companies listed below: I raveners Lta (" I raveners"): 1. Pionier acquired its shareholding in Travellers, an extremely profitable company which installs security doors. In the last couple of years there was an increased demand for security door installation services in the Namibian market. 2. Pionier acquired its interest on 1 January 2017 when the general reserve and the retained earnings were N$48000 and N$24000, respectively. During the current financial year N$ 60000 was transferred from retained earnings to the general reserve in the books of Pionier Ltd and N$30000 was transferred from retained earnings to general reserve in the books of Travellers Ltd. 3. Assume that the identifiable assets and liabilities acquired at acquisition date are shown at their acquisition-date fair values, as determined in terms of IFRS 3, Business combinations. 4. TT Ltd is an unlisted company with issued share capital and the investment in TT does not constitute any form of control or significant influence over TT. The bank overdraft of Travellers is guaranteed by Pionier. 5. The Cost of Sales is calculated at a 50% markup. The Cost of sales of Pionier for the year under review was N$1250000. The revenue of Travellers for the year under review was N$ 1125000. 6. The Property, plant and equipment in the companies of the group was calculated using the 20% per year diminishing value method. None of the property, plant and equipment has been fully depreciated at the end of the year. Depreciation has already been calculated and taken into consideration in the trial balance. 7. The finance costs on the long term loans were N$36000 and N$18000 for the parent and subsidiary respectively. Dividends received on the investment from TT Ltd by the parent was N$6000 for the period under review. The remaining costs are other expenses. Additional Information - Pionier elected to measure any non-controlling interests in Travellers at its proportional share of Travellers's identifiable net assets at acquisition date. - Pionier classifies the equity investments in Travellers at cost in accordance with IFRS 9 , Financial Instruments. - Please note you should use the income tax figures indicated above and don't have to recalculate the income tax expense. Required: a) Prepare the analysis of the share holders' equity of Travellers Ltd as at the acquisition date and show the calculation of goodwill or gain on bargain purchase where applicable. (6) b) Prepare a Statement of profit or loss and other comprehensive income for the year ended 31 December 2021 of the Pionier group in accordance with IFRS. Notes and comparative figures are not required. The revenue, cost of sales, gross profit and different income and various expense items needs to be clearly indicated on the Statement of profit or loss and other comprehensive income for the year. (13) c) Prepare the Consolidated statement of financial position of the Pionier group as at 31 December 2021, in accordance with International Financial Reporting Standards (IFRS). Notes and comparative figures are not required. One (1) mark will be allocated for Presentation Skills. (18)