fx A B C D F 1 2 On 1 June 2015, Makola acquired 80% of the ordinary shares of Kejetia for GH60 million when Kejetia's other reserves were GH6 million and retained earnings were GH10 million. 3 4 Kejetia acquired 70% of the ordinary shares of Kotokuraba on 1 June 2015 for GH32 million when the other reserves of Kotoku were GH6 million and retained earnings were GH4 million. 5 Below are the statements of financial position of the three companies as at 31 May 2017. 6 7 Makola GH000 Kejetia GH000 Kotokuraba GH000 8 Assets 9 Non-current assets 10 Property, Plant and Equipment 11 Investment in Kotokuraba 12 Investment Property 50,000 32.000 50,000 13 14 Current assets Inventory 50.000 25.000 ########## 15 Trade receivables 25.000 16 Cash balance 80.000 5,000 30.000 ########## ########## 17 Total assets ######## ###### 70,000 18 Equity and liabilities 19 Ordinary shares ######## 20 Other reserves 21 Retained earnings 40.000 30,000 90.000 6.000 30.000 ########## ########## ########## 22 Total equity 23 Non-current liabilities ######## ###### 38,000 24 Loans & Debentures 25 Current liabilities 26 Bank Overdraft 27 Total liabilities 28 Total equity and liabilities 45,000 40,000 45.000 75.000 10.000 16.000 ###### 70.000 ########## ########## 29 30 The following information is relevant to the preparation of the group financial statements. 31 32 i) There have been no issues of ordinary shares in the group since 1 June 2015. 33 34 35 37 38 39 40 41 42 43 36 ii) Kejetia owns several trade names which are highly regarded in the market place. Kejetia has invested a significant amount in marketing these trade names and has expensed the costs. None of the trade names has been acquired externally and, therefore, the costs have not been capitalised in the statement of financial position of Kejetia. On the acquisition of Kejetia by Makola, a firm of valuation experts valued the trade names at GH5 million and this valuation had been taken into account by Makola when offering GH60 million for the investment in Kejetia. The valuation of the trade names is not included in the fair value of the net assets of Kejetia above. Group policy is to amortise intangible assets over ten years. iii) On 1 June 2016, Makola sold inventory costing GH20 million to Kejetia for GH24 million. At 31 May 2017, the inventory was still held by Kejetia. The inventory was sold to a third party on 15 July 2017 for GH35 million. 44 As at the date of reporting, kejetia had paid only 95% of the goods bought from Makola. 45 46 47 48 49 50 51 52 v) On 31 May 2017, Makola acquired plant with a fair value of GH6 million. In exchange for the plant, the supplier received land, which was currently not in use, from Makola. The land had a carrying value of GH4 million and an open market value of GH7 million. In the financial statements at 31 May 2017, Makola had made a transfer of GH4 million from land to plant in respect of this transaction. vi) On 31st May 2017, the Board of Directors of the Parent of the Group agreed to sell half of the shares acquired in Kotokuraba for GH80 million. 53 54 vi) Goodwill has been tested for impairment at 31 May 2016 and 31 May 2017 and no impairment loss occurred. It is 55 56 the group's policy to value the non-controlling interest at acquisition at its proportionate share of the fair value of the subsidiary's identifiable net assets. 57 (Ignore any taxation effects) 58 59 Required: 60 61 Prepare the consolidated statement of financial position of the Makola Group as at 31 May 2017 in accordance with International Financial Reporting Standards (IFRS). 62 (20 marks) 63 64 65 66 67 68 69 70