4. The Statements of Financial Position of Cenn, a specialist sports goods retailer, and two entities in which it holds substantial investments are shown below as at 31 March 2017:

Cenn GH

Non-Current Assets

Property and Plants 12500 Investments 18000

Apeen GH

4700 - 4700

8000 4300 -

12300 17000

5000 1000

6000 3000

8000 17000

Emershem GH

4500 1300 5800

- 3100 2900

6000 11,800

2500 4300

6800 -

4000 600 400

5000 11800

Current Assets Inventories

Trade Receivables Cash

Total Assets

Equity and Liability

Ordinary Share Capital (GH1)

Reserves

Equity

Non-Current Liability

Loan Notes

Current Liability Trade Payables Tax

Over drafts

Total Equity plus Liability

30500

7200 6300 800

14300 44800

10000 14000

24000 10000

8900 1300 600

10800 44800

6700 100 1200

The following notes to the Statements of Financial Investment by Cenn in Apeen;

a. On 1 April 2014, Cenn purchased GH2 million

2015, Cenn purchased 4 million of the ordinary

cash, when Apeens reserves were GH1.5 million. At this date the shares of Apeen had a market price of GH1.50 each. At the date of acquisition of the shares, Apeens property and plant included land recorded at a cost of GH920,000. At the date of acquisition, the fair value of the land was GH1,115,000. No other adjustments in respect of fair value were required to Apeens assets and liabilities upon acquisition. Apeen has not recorded the fair value in its own accounting records.

b. On 1 October 2016, Cenn acquired 1 million shares in Emersham, a sports goods manufacturer, when the reserves of Emersham were GH3.9 million. The purchase

Position must be considered Note 1

loan notes in Apeen at par. On 1 April shares in Apeen for GH7.5 million in

consideration was GH4.4 million. Since the acquisition, Cenn has had the right to appoint two of the five directors of Emersham and can exercise significant influence over Emersham.

c. No fair value adjustments were required in respect of Emershams assets or liabilities upon acquisition.

d. Since acquiring its investment in Apeen, Cenn has adopted the requirements of IFRS 3 Business Combinations in respect of goodwill on acquisition. During March 2017, it conducted an impairment review of goodwill. As a result, the goodwill element of the investment in Emersham is unaltered, but the value of goodwill on consolidation in respect of Apeen is now GH1.7 million, i.e. after impairment.

e. Apeen supplies cricket bats to Cenn. On 31 March 2017 Cenns inventories included bats purchased at a total cost of GH1 million from Apeen. Apeens mark-up on bats is 25%.

Required:

(a) Explain, with reasons, how the investments in Apeen and Emersham will be treated in the consolidated financial statements of the Cenn group.

(b) Prepare the Consolidated Statement of Financial Position for the Cenn group at 31 March 2017. Full workings should be shown