2 H Hastings Group 25 MARKS You are the consolidation accountant at the Hastings Group Limited (Hastings Group), a diversified group of companies engaged in the household and consumer goods industry. You are presented with the following information in respect of the Hastings Group: STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 4. During the course of the year ended 31 December 2019, Bridgertoo commenced selling goods to Hastings Group. These goods were sold at a mark-up of 50% above cost price. Inter-company sales figures were: Year to 31 December 2019 Year to 31 December 2020 R6 500 000 R7 000 000 Hastings Group's closing inventory of inter-company items purchased from Bridgetto were as follows: Turnover Operating profit Finance costs Profit before taxation Taxation expense Profit after taxation Hastings Limited R'000 12 600 8 200 Bridgerton Limited R'000 10 200 Date 31 December 2019 Amount R3 000 000 30 June 2020 R4 500 000 6 000 1.000 400 7 200 5 600 31 December 2020 R2 400 000 2.000 1 600 5 200 4 000 5 200 4 000 Other comprehensive income Total comprehensive income EXTRACT FROM THE STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2020 Hastings Limited R'000 Retained earnings Bridgerton Limited R'000 Retained Balance 1/1/2020 Profit for the year to 31/12/2020 8 600 5 200 earnings 4 800 4 000 Dividends paid 30/11/2020 Balance 31/12/2020 (800) 13 000 (400) 8 400 Notes Inventory was sold externally before 30 June 2020 Inventory was sold externally before 31 December 2020 Purchased by Hastings Group after 30 June 2020. 5. All items of income and expense in the statement of profit or loss and other comprehensive income have occurred at an even rate over the course of the year. 6. The taxation rate is 28% and the CGT inclusion rate is 80%. Deferred tax is provided in terms of IAS 12 Income Taxes. 7. All fair value adjustments to investments in equity are recorded in profit or loss in terms of IFRS 9 Financial Instruments. REQUIRED: Prepare the consolidated statement of comprehensive income and statement of (25) changes in equity for the year ended 31 December 2020. Notes to the financial statements and comparative figures are not required. Work to the nearest Rands in thousands (000). Additional Information 1. On 1 January 2018, Hastings Group obtained significant influence over Bridgedoo Limited (Bridgerton) when it purchased 3 000 of Bridgerton's 10 000 issued ordinary shares at a cost of R6 300 000. At that date, the retained earnings of Bridgeton amounted to R1 800 000 and the fair value of Bridgerton's assets and liabilities were considered to be fairly valued. 2. On 30 June 2020, Hastings Group acquired a further 5 000 shares in Bridgerton for R18 000 000, which then gave Hastings Group control over Bridgerton. At that date, Hastings Group considered the fair value of the land of Bridgerton to be R2 400 000 greater than the recorded carrying amount. 3. On acquiring control of Bridgedoo, Hastings Group measured the non-controlling interest in Bridgerton at their proportionate share of identifiable fair net asset value. On 30 June 2020, the fair value of the previously-held 30% investment in Bridgerton was R10 200 000. Show all calculations clearly