Exercise 3 (20 Points) The following financial information is available for P Ltd. and S Ltd at 31.12.20X5: Single financial statement 31.12.X5 P Ltd S Ltd Assets PP&E 8400 1920 Investments 3200 Inventories 3520 1120 Receivables 2320 1680 Cash 1600 32 Sum 19040 4752 Liabilities and equity Share capital 9600 2720 Retained earnings 3440 800 Long-term borrowings 1600 Payables 4400 1232 Sum 19040 4752 The following further information is available: .P Ltd had acquired 80% of the shares of S Ltd 5 years ago, when retained earnings of S Ltd were 288 Mio. . P Ltd had paid 3,200 Mio. for its stake in S Ltd. .P Ltd and S Ltd have both issued only ordinary shares with a par value of 1 . In the past 5 years S Ltd had performed extremely well and this trend is not expected to reverse in the future. . At the date of acquisition PP&E of S Ltd was revalued upwards by 160 Mio. (this was not recorded in the accounts of S Ltd). Depreciation would have been 128 Mio. higher. .S Ltd buys goods from P Ltd upon which P Ltd earns a margin of 20%. At 31.12.20X5 the inventories of S Ltd include 720 Mio of goods purchased from P Ltd. At 31.12.20X5 P Ltd has receivables of 560 Mio. owed by S Ltd and payables of 240 Mio. owed to S Ltd. . The market price of shares of S Ltd just before the acquisition of S Ltd by P Ltd was 1.30 . It is the group's policy to value the non-controlling interest at fair value. Prepare the group consolidated statement of financial position as at 31.12.20X5 (Hint: Determine the fair value of equity of S Ltd. and goodwill at acquisition first)