32 The following are the draft statements of nancial position of Party [30 and Streamer Co as at 30 September 2OX5: Party Co Streamer Co $'ooo $'ooo ASSETS Non-current assets Property, plant and equipment 392,000 84,000 Investments 120,000 Nil 512,000 84,000 Current assets 94,700 44,650 Total assets 606,700 128,650 EQUITY AND LIABILITIES Equity Equity shares 190,000 60,000 Retained eamings 210,000 36,500 Revaluation surplus 41,400 4,000 441,400 100,500 Non-current liabilities Deferred consideration 28,000 Nil Current liabilities 137,300 28,150 Total equity and liabilities 606,?00 128,650 The following information is relevant: (it On 1 October 20x4, Party (30 acquired 80% of the share capital of Streamer Co. At this date the retained earnings of Streamer Co were $34m and the revaluation surplus stood at $4m. Party Co paid an initial cash amount of $92m and agreed to pay the owners of Streamer Co a further $28m on 1 October 201-16. The accountant has recorded the full amounts of both elements of the consideration in investments. Party Co has a cost of capital of 8%. The appropriate discount rate is 0-857. (ii) On 1 October 20x4, the fair values of Streamer Go's net assets were equal to their canying amounts with the exception of some inventory which had cost $3m but had a fair value of $3-6m. On 30 September 20x5, 10% of these goods remained in the inventories of Streamer Co. (iii) During the year, Pa rty Co sold goods totalling $8m to Streamer Co at a gross prot margin of 25%. At 30 September 20x5, Streamer 00 still held $1m of these goods in inventory. Partyr Co's normal margin (to third party customers} is 45%