Lemon acquired 30% of equity shares in orange ltd on 1 January 2018 at a cost of $132,000. On the same day the fair value of the net assetscof orange ltd was $315,000. At the end of 2021, the net assets of Orange ltd were $540 000 and net profit after tax were $72 000.

REQUIRED

a. Identify whether Lemon ltd has control or significant control over Orange ltd and justify your answer

b. Calculate the value of investment in Orange ltd that would be included in the financial statement of Orange ltd for the year ended 2021.