(b) Prepare the Consolidated Statements of Financial Position as at 30 September 20X3 for Fumina Group

The statements of nancial position for Fumina and Daka as at 30 September 20x3 are provided below: Fumina Daka ASSETS K'OOO K'000 gm-cgrent assets rope . Plant and equipment 22 000 5.000 Available for sale investment (note (m 4000 66 .000 Current assets 26' 0 5 Inventories 6 200 800 Receivables ' 6,600 1,900 Cash and cash equivalents 1:200 300 ; . 14,000 "3"\".ooo Total assets ' , 40,000 8,000 EQUITY AND LIABILITIES Equity Share capital (K1 equity shares) 20.000 LOCO Retained earnings 7,500 5,000 Other components of equity 500 - Total equity ,. ,' 28,000 '3 6.000 Non-current liabilities 7 5% Bonds zoxe (note (in) 3.900 - Current liabilities . . 8, 100* 2.000 Total liabilities _ 12.500 _ 2.000 Total equity and liabilities W 8.000 Additional information o Fumina acquired a 15% investment in Daka on 1 May 20X1 for K600,000. Fumina made an irrevocable election at initial recognition to measure this equity instrument at fair value through other comprehensive income. The gains earned on the investment have been recorded within other reserves in Fumina's individual financial statements. The fair value of the 15% investment at 1 April 20x3 was K800,000. 0n 1 April 20x3, Fumina acquired an additional 60% of the equity share capital of Daka at a cost of K2,900,000._ In. itsowh financial statements, Fumina has kept its investment in Daka as measured at FVTOCI at its fair value of K4m as at 30 September 20x3. . Fumina issued 4m K1 5% redeemable bonds on 1 October 20x2 at par. The associated costs of issue were K100,000 and the net proceeds of K3.9m have been recorded within non-current liabilities. The bonds are redeemable at K4.5m on 30 September 20X6 and the effective interest rate associated with them is approximately 8.5%. The interest on the bonds is payable annually in arrears and the amount due has been paid in the year to 30 September 20x3 and charged to profit or loss. 0 _, . ' _ - .. o Anrimpairment review was conducted at the year end and it was decided that the goodwill on the acquisition of Daka was impaired by 10%. , his the group policy to value non-controlling interest at fair value at the date of acquisition. The fair value of the non-controlling interest at 1 April 20X3 was K1.25m. ' o The profit for the year of Daka was K3m, and profits are assumed to accrue evenly throughout the year. - Daka sold goods to Fumina for K400,000. Half of these goods remained in inventories at 30 September 20x3. Daka makes 20% margin on all sales. o No dividends were paid by either entity in the year to 30 September 20X3. Required (3) Explain how the investment in Daka should be accounted for in the consolidated financial statements of F umina, following the acquisition of the additional 60% shareholding. (7 marks)