On $1$ January $2023$ Haverford Ltd$.$ acquired $90\%$ of the equity share capital of

Victular Ltd$.$ in a share exchange in which Haverford issued two new shares for

every three shares it acquired in Victular.

At the date of acquisition, shares in Haverford and Victular had stock market values

of $6\mathrm{.}50$ and $2\mathrm{.}50$ each, respectively.

Statement of Profit or Loss for the year ended $30$ September $2023$

Haverford Victular

$000000$

Revenue $64,60038,000$

Cost of sales $(51,200)(26,000)$

Gross profit $13,40012,000$

Distribution costs $(1,600)(1,800)$

Administrative expenses $(3,800)(2,400)$

Investment income $500$ nil

Finance costs $(420)(100)$

Profit before tax $8,0807,700$

Income tax expense $(2,800)(1,500)$

Profit for the year $5,2806,200$

Revaluation surplus $550470$

Comprehensive income $5,8306,670$

Additional information.

Equity as at $1$ October $2022$:

Equity shares of $1$ each $30,00010,000$

Retained earnings $54,00035,000$

The following information is also relevant:

$($i$)$ At the date of acquisition, the fair values of Victular$$s assets were equal to their

carrying amounts with the exception of:

An item of plant had a fair value of $1\mathrm{.}8$ million above its carrying amount. The

remaining life of the plant at the date of acquisition was three years. Depreciation

is charged to cost of sales.

Haverford had not incorporated this fair value change into its financial

statements.

$($ii$)$ Sales from Haverford to Victular throughout the year ended $30$ September $2023$

had consistently been $800,000$ per month. Haverford made a mark$-$up on cost

of $25\%$ on these sales. Victular had $1\mathrm{.}5$ million of these goods in inventory as

at $30$ September $2023.$

$($iii$)$ At the date of acquisition Haverford had lent Victular $5$ million at a preferential

annual rate of $2\%.$ Both companies had accounted for the interest.

$($iv$)$ Although Victular has been profitable since its acquisition by Haverford, the

market for Victular$$s products have been badly hit in recent months and

Haverford has calculated the goodwill has been impaired by $2$ million as at $30$

September $2023.$

$($v$)$ The revaluations in both companies arose at the end of the year.

Required:

$($a$)$ Calculate the consolidated goodwill at the date of acquisition.

$($b$)$ Prepare the consolidated profit and loss and other comprehensive income for

Haverford for the year ended $30$ September $2023.$