Company A$,$ a publicly traded entity, acquired an $80\%$ interest in Company B$,$ a private company, on January $1,2005,$ for R$1,000,000.$ Company B$\text{'}$s equity at that date consisted of the following:

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Share capital: R$500,000$

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Retained earnings: R$200,000$

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Other reserves: R$50,000$

Company A applies the fair value method for valuing non$-$controlling interests. The fair value of the non$-$controlling interests in Company B at the acquisition date was R$150,000.$

During the year $2005,$ Company B reported a profit of R$100,000,$ and it paid dividends of R$20,000.$

Company A also holds a $35\%$ interest in Company C$,$ an associate, at the end of $2005.$ Company C reported a profit of R$50,000$ for the year.

Required:

$1\mathrm{.}1$

Calculate the goodwill arising on the acquisition of Company B$,$ taking into account the fair value method. Show all necessary calculations. $(5$ marks$)$

$1\mathrm{.}2$

Prepare the consolidated statement of financial position for Company A and its subsidiaries $($Company B and its interest in Company C$)$ as of December $31,2005.$ Include the treatment of non$-$controlling interests and the investment in the associate.

$(5$ marks$)$

$1\mathrm{.}3$

Calculate the share of profit attributable to non$-$controlling interests and the share of profit from the associate for the year ended December $31,2005,$ and include them in the consolidated statement of comprehensive income. $(5$ marks$)$