Assume that you are Ms. Annie Wong, the accounting manager of Pacific Limited (PCL). The financial year-end date of PCL is 31 December. PCL acquired 80% of the ordinary shares of Stanford Limited (STF) for $26,550 on 1 January 2021. At the acquisition date, STF had retained earnings of $12,250 and share capital of $15,000. All identifiable assets and liabilities of STF are recorded at fair value on the acquisition date except the following items. The inventory was all sold by 31 December 2021, and the plant had a further expected useful life of 5 years. Both companies adopted the straight-line depreciation method. PCL chose to measure the non-controlling interest in STF as a proportion of the fair value of the acquiree's net identifiable assets on the date of acquisition. Investment in STF was carried at cost. There has been no impairment of goodwill since the acquisition of STF. On 1 January 2023, PCL held an inventory of $2,500 purchased from STF during the year ended 31 December 2022. The inventory has been manufactured by STF at a cost of $1,600. The inventory was sold by PCL for $3,000 on 30 May 2023. In 2023, STF sold inventory costing $6,000 to PCL for $9,000, and 50% of this inventory was still on hand on 31 December 2023 . PCL and STF are subject to a tax rate of 30%. An extract of the financial statements of the two companies for the year ended 31 December 2023 is shown below: You have prepared the draft consolidated financial statements of PCL for the year end of 31 December 2023. After you sent these draft consolidated financial statements to PCL directors for review, one of the directors, Mr. David Lam, sent you an email with the following questions: 1. I am puzzled about the valuation of the non-controlling interest in STF. I heard that noncontrolling interest could be measured either at the fair value or the proportionate share of the acquiree's identifiable net assets. What are the differences between these two valuation methods? Will these two methods affect the calculation of goodwill? 2. I find that it is difficult to obtain the figures in the consolidated financial statements. Can you tell me more about how you arrived at each figure? Requirements: a. Briefly discuss what is "non-controlling interest" and explain why non-controlling interests were classified as equity rather than debt in IFRSI0. (2 marks) b. How do the two valuation methods of the non-controlling interest affect the determination of goodwill? Which method is supported more by the International Accounting Standards Board, and why? (4 marks) c. Calculate the amount of goodwill arising from investment in STF. (5 marks) d. Prepare the worksheet entries for the preparation of the consolidated financial statements of PCL and its subsidiary, STF, on 31 December 2023. (24 marks) e. Prepare the following consolidated financial statements: a) Consolidated statement of comprehensive income of PCL for the year ended 31 December 2023. ( 5 marks) b) Consolidated statement of changes in equity of PCL for the year ended 31 December 2023. ( 5 marks) c) Consolidated statement of financial position of PCL as at 31 December 2023