On 1 April 2021, Guess acquired 60 of the equity share capital of Elle in a share exchange of two shares in Guess for three shares in Elle The issue of shares has not yet been recorded by Guess At the date of acquisition shares in Guess had a market value of RM5 each Below are the summarised draft financial statements of both companies STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH 2022 Guess Elle RM000 RM000 Revenue 85,000 42,000 Cost of sales (63,000) (32,000) Gross profit 22,000 10,000 Distribution costs (2,000) (2,000) Administrative expenses (6,000) (3,200) Finance cost (300) (400) Profit before tax (13,700) (4,400) Income tax expense (4,700) (1,400) Profit for the year 9,000 3,000 STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2022 Guess Elle Assets RM000 RM000 Non current assets Property, plant equipment 40,600 12,600 Current assets 16,000 6,600 Total assets 56,600 19,200 Equity and liabilities Equity shares of RM1 each 10,000 4,000 Retained earnings 35,400 6,500 45,400 10,500 Non current liabilities 10 loan notes 3,000 4,000 Current liabilities 8,200 4,700 Total equities and liabilities 56,600 19,200 You are provided with the following additional information Elle had plant in its Statement of Financial Position at the date of acquisition with carrying value of RM1,000,000 but a fair value of RM2,500,000 The plant had a remaining life of 3 years at acquisition Depreciation is charged to cost of sales The Guess group values the non controlling interests at fair value The fair value of the non controlling interests at the date of acquisition was RM4,500,000 Goodwill is to be impaired by 10 at the reporting date During the year Elle sold some goods to Guess for RM6,000,000 at a markup of 20 60 of the goods had been sold during the year At the yearend, Elles books showed a receivables balance of RM900,000 as being due from Guess This is disagreed with the payables balance of RM400,000 in Guesss books due to Guess having sent a cheque to Elle shortly before the year end which Elle had not yet received Required Prepare the consolidated statement of profit or loss and consolidated statement of financial position for Guess for the year ended 31 March 2022 Detail out the steps, work and calculations properly

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On 1 April 2021, Guess acquired 60% of the equity share capital of Elle in a share exchange of two shares in Guess for three

On 1 April 2021, Guess acquired 60% of the equity share capital of Elle in a share exchange of two shares in Guess for three shares in Elle. The issue of shares has not yet been recorded by Guess. At the date of acquisition shares in Guess had a market value of RM5 each. Below are the summarised draft financial statements of both companies.

STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH 2022

	Guess	Elle
	RM000	RM000
Revenue	85,000	42,000
Cost of sales	(63,000)	(32,000)
Gross profit	22,000	10,000
Distribution costs	(2,000)	(2,000)
Administrative expenses	(6,000)	(3,200)
Finance cost	(300)	(400)
Profit before tax	(13,700)	(4,400)
Income tax expense	(4,700)	(1,400)
Profit for the year	9,000	3,000

STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2022

	Guess	Elle
Assets	RM000	RM000
Non-current assets
Property, plant & equipment	40,600	12,600
Current assets	16,000	6,600
Total assets	56,600	19,200
Equity and liabilities

Equity shares of RM1 each	10,000	4,000
Retained earnings	35,400	6,500
	45,400	10,500
Non-current liabilities
10% loan notes	3,000	4,000
Current liabilities	8,200	4,700
Total equities and liabilities	56,600	19,200

You are provided with the following additional information:

Elle had plant in its Statement of Financial Position at the date of acquisition with carrying value of RM1,000,000 but a fair value of RM2,500,000. The plant had a remaining life of 3 years at acquisition. Depreciation is charged to cost of sales.

The Guess group values the non-controlling interests at fair value. The fair value of the non-controlling interests at the date of acquisition was RM4,500,000. Goodwill is to be impaired by 10% at the reporting date.

During the year Elle sold some goods to Guess for RM6,000,000 at a markup of 20%. 60% of the goods had been sold during the year. At the yearend, Elles books showed a receivables balance of RM900,000 as being due from Guess. This is disagreed with the payables balance of RM400,000 in Guesss books due to Guess having sent a cheque to Elle shortly before the year end which Elle had not yet received.

Required

Prepare the consolidated statement of profit or loss and consolidated statement of financial position for Guess for the year ended 31 March 2022.Detail out the steps, work and calculations properly