Issue 5 Solar Plc recently acquired a company called Lakeside Ltd, a timber harvesting and landscaping company for 4 million in July 2021. Solar Plc allocated the purchase consideration as follows: Goodwill Timber cutting quotas Timber harvesting machines (two of equal value) Other timber cutting equipment Timber processing plant Net current asset 000 480 800 2,000 200 400 120 4,000 Shortly after the acquisition, one of the timber harvesting machines was damaged in a landslide and this has halved the timber cutting capacity. Due to this reduction in capacity, the value in use of the timber cutting business as a going concern is estimated at only 2.4 million. The timber cutting quotas now represent a greater volume than one machine can harvest, and it is not possible to replace the damaged harvesting machine as it was rather old and no equivalent machines are available. However, the timber cutting quotas are much in demand and could be sold for 1,200,000. Lakeside has been offered 500,000 for the timber processing plant. The net current assets consist of accounts receivable and payable. Required: Calculate and explain how the impairment will affect the consolidated financial statements of Solar Plc in respect of Lakeside's assets on 30 September 2021. You should use clear workings and provide explanations. (10%)