3: (30 marks) The financial information for Hong Kong Ltd's group was summarized as follows: Consolidated income statement and statement of retained profit for the year ended 31 December 2019: Operating loss Share of profits of associates. Loss before tax Tax recovered Loss after tax Profit/(loss) attributable: - Parent company - Non-controlling interest Retained profit at 1 January 2019 Profit for the year Dividends paid Retained profit as at 31 December 2019 $ (1,500) 1,100 (400) 300 (100) 500 (600) (100) 2,620 500 (150) 2.970 Consolidated statement of cash flows for the year ended 31 December 2019 $ $ Cash flows from operating activities: Operating loss (1,500) Goodwill impaired 740 Depreciation expense 1,000 Decrease in current assets 2,500 Tax received 40 2,780 Cash flows from investing activities Acquisition of subsidiary (520) Acquisition of associate (500) Purchase of tangible assets (2,000) Dividends from associates 800 (2,220) Cash flows from financing activities Increase in long term loan 500 Issues of share capital 100 Dividends paid to company shareholders (150) Dividends paid to non-controlling interest (140) 310 Net changes in cash 870 Cash at 1 Jan 2019 (500) Cash at 31 Dec 2019 370 Consolidated statement of financial position at 31 December 2018: Intangible assets - goodwill Tangible assets Investments in associates Current assets (other than cash) Bank overdraft Tax payable Long-term loan $ 600 8,000 4,300 3,120 (500) (100) (3,800) Cash at bank ' 11,620 Share capital 9,300 Retained profit at 1 January 2019 2,620 11,920 Non-controlling interest (300) 11,620 Additional information: 1. Dividend received from associates for the year amounted to $800. 2. The group acquired a 25% interest in a new associate during the year for $500 by cash. 3. The group acquired a 80% interest in a new subsidiary during the year as follows: Fair value of subsidiary's net identifiable assets at the date of acquisition: Tangible assets Cash at bank Current assets (other than cash) Bank overdraft Tax recoverable Consideration given by parent company: 3,500 @$1 ordinary shares Cash $ 3,000 300 1,500 (650) 50 4.200 3,830 170 4,000 Required: a) According to HKFRS 3 (Revised), compute the goodwill of the new subsidiary assuming the non-controlling interests are stated at the proportion of the net assets. (3 marks) b) Provide possible explanations for loss attributable to non-controlling interests but not to shareholders of the parent company for the year ended 31 December 2019. (5 marks) c) Prepare the consolidated statement of financial position of Hong Kong Ltd and its subsidiaries for the year ended 31 December 2019 in proper format. (22 marks)