40) On 1 January 20X4, Plastik sequired 80% of the equity share capital of Subtrak. The consideration was satisfied by a share exchange of two shares in Plastik for everythree acquired shares in Subtrak. At the date of acquisition, shares in Plastik and Subtrak had a market value of SJ and S2.50 each respectively. Plastik will albo pay cash consideration of 275 cents on 1 January 20X3 for each acquired share in Subtrak. Plastik has a cost of capital of 10% per annum. None of the consideration has been recorded by Pastik. Below are % Plastik the summarised draft financial statements of both companies STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2X4 P Suherak SO so Revenue 62.600 30.000 Cost of sales 145.800 (24.000 Gross profit 16.800 6,000 Distribution costs (2.000) (1.2009 Administrative expenses (1.800) 6.500) Compiled by Dakito Alemu (Ph.D) Finance costs (200) Profis before tax 11.100 3.000 Income tax expense 3.100 (1.000) Profit for the year S000 2.000 Other comprehensive income Gain on revaluation of property 1.500 Total compechensive income 9.500 2.000 STATEMENTS OF FINANCIAL POSITION AS AT 30 SEPTEMBER 20X4 Plastik Subtrak 5000 S000 ASSETS Property, plant and equipment 18.200 13.900 Inventory (note) 4.300 1.200 Trade receivables 5,700 2.500 Bank 300 10.000 4000 Total asics 28,200 17.900 EQUITY AND LIABILITIES Equiry Equity shares of Slcach 10.000 9.000 Revolution surplus (1) 2.000 Retained carings 6300 2512 11.200 12.500 Nowo-ewwent liabilities 10% loan notes notei) 2.500 1.000 Current liabilities Trade payables (0) 3,400 3.600 1.700 Cument tax payable 28 800 7.900 4.400 Total equity and liabilities 28.70 17.900 Bank Compiled by Dokite Alemu (Ph.D) The following information is relevant: (1) At the date of acquisition, the fair values of Surak's stand liabilities were equal to their carrying amounts with the exception of Subtrak's property which had a fair value of S4 million above its carrying amount. For consolidation purposes, this led to an increase in depreciation charges (in cost of sales) of $100.000 in the post-acquisition period to 30 September 20X4. Subtrak has not incorporated the fair value property increase into its entity financial statement. The policy of the Plastik group is to revalue all properties to fair value at each year en rend On 30 September 20X4, the increase in Plastik's property has already been recorded however, a further of $600,000 the value of Subtrak's property since its value aquisition and 30 September 20X4 has not been recorded. (1) Sales from Plastik to Subtrak throughout the year ended 30 September 20X4 had consistently been $300,000 per month Plastik made a mark-up cost of 2% on all these sales. $600,000 (at cost to Subtrak) of ce ce Subtrak's inventory at 30 September 20X4 had been supplied by Plastik in the post-acquisition period (11) Pastik's policy is to value the non-controlling interest at fait value at the date of acquisition. For this purpose Subtrak's share price at that date can be deemed to be representative of the fair value of the shares held by the controlling inforest (iv) Due to recent adverse publicity concerning one of Substrak's major product lines, the goodwill which arose on the acquisition of Suhtrak has been impaired by $500,000 as at 30 September 20X4. Goodwill impairment should be treated as an administrative expense (1) Assume, except where indicated otherwise that all item of income and expenditure accrue evenly throughout the year Required Calculate the goodwill arising on the acquisition of Suterakon 1 January 20X4. (b) Calculate the following amounts for presentation in the consolidated statement of financial position Group retained comings (i) Non-controlling interest (c) Prepare the consolidated statement of peolit or loss and other comprehensive income for Plastik for the year ended 0 Setember 20X4