On 1 April 2020, Peple plc acquired 3.24 million of Stem plcs 1 equity shares when Stem plcs retained earnings were 2.52 million. The draft financial statements of Peple plc and Stem plc at 31 March 2022 are:

Additional information:

(i) All assets of Stem plc were fairly stated at acquisition date. The directors of Peple plc measure any non-controlling interests in Stem plc at fair value. The fair value of the non-controlling interests was valued at 3,402,000 at the date of acquisition.

(ii) During the current financial year, Stem plc sold goods to Peple plc for 60,000. The sales had a markup of 20% on cost. On 31 March 2022, Peple plc had 40% of these goods still in inventory.

(iii) On 1 April 2021, Peple plc sold an item of machinery to Stem plc for a price of 128,000, which had a cost of 155,000. Its carrying amount in Peple plcs accounts was 108,500 and it was being assessed as having a remaining useful life of three years with no expected residual value. The groups depreciation policy was to depreciate their non-current assets on a straight-line basis based on the assets useful life.

(iv) The directors believe that there has been an impairment on the goodwill acquired. It was impaired by 22,000 in the year to 31 March 2022.

(v) During the current financial year, Peple plc and Stem plc distributed dividends amounting to 576,000 and 108,000 respectively. On 15 March 2022, Peple plcs and Stem plcs directors declared and communicated to the shareholders that they would pay a final dividend amounting to 144,000 and 36,000 respectively. These final dividends have been accounted for in the accounts payable and receivable for both companies.

(vi) Peple plc and Stem plcs retained earnings as at 1 April 2021 were 3.6 million and 2.88 million respectively.

(vii) Peple plc and Stem plc have not issued any new equity shares since the acquisition.

(viii) Assume the tax rate has remained at 20% since 1 April 2020.

REQUIRED:

(a) Prepare the consolidated statement of comprehensive income for Peple plc and its subsidiary for the year ended 31 March 2022.

(b) Prepare the consolidated statement of financial position for Peple plc and its subsidiary as at 31 March 2022.

\begin{tabular}{lrr} Statements of comprehensive income & Peple plc & Stem plc \\ & f000 & f000 \\ Revenue & 1,728 & 414 \\ Cost of sales & (360) & (144) \\ Other expenses & (288) & (54) \\ Other income & 252 & 90 \\ \hline Profit before tax & 1,332 & 306 \\ Tax expense & (216) & (108) \\ \hline Profit for the year & 1,116 & 198 \\ \hline \end{tabular} Statements of financial position ASSETS Pepleplc000Stemplc000 Non-current assets Land Property, plant and equipment Accumulated depreciation 5,0406,732(1,440)3,9784,680(1,080) Investment in Stem plc 7,200 17,5327,578 Current assets Inventory Accounts receivable 1,8009001,080630 Cash Total assets 20,7729,378 LIABILITIES Non-current liabilities Loans 2,160900 Current liabilities \begin{tabular}{lrr} Accounts payable & 216 & 144 \\ \hline Total liabilities & 2,376 & 1,044 \\ \hline Net assets & 18,396 & 8,334 \\ \hline \end{tabular} EQUITY Equity and reserves Share capital Retained earnings \begin{tabular}{rr} 14,400 & 5,400 \\ 3,996 & 2,934 \\ \hline 18,396 & 8,334 \\ \hline \end{tabular}