On 1 January 2015, Paul acquired 75% of Sauls equity shares by means of an immediate share exchange of two shares in Paul for five shares in Saul. The fair value of Paul and Sauls shares on 1 January 2015 were $4.00 and $3.00, respectively. In addition to the share exchange, Paul will make a cash payment of $1.32 per acquired share, deferred until 1 January 2016. Paul has not recorded any of the consideration for Saul in its financial statements. Pauls cost of capital is 10% per annum. The summarized statement of financial position of the two companies as at 30 June 2015 are:

The following additional Information is relevant:

(i) Sauls business is seasonal and 60% of its annual profit is made in the period 1 January to 30 June each year.

(ii) At the date of acquisition, the fair value of Sauls net assets was equal to their carrying amounts with the following exception: An item of plant had a fair value of $2 million below its carrying value. At the date of acquisition, it had a remaining life of two years. The fair value of Sauls investment was $7 million Saul owned the rights to a popular mobile (cell) phone game. At the date of acquisition, a specialist valuer estimated that the rights worth $12 million and had an estimated remaining life of 5 years.

(iii) Following an impairment review, consolidated goodwill is to be written down by $3 million as at 30 June 2015. (iv) Paul sells goods to Saul at cost plus 30%. Saul had $1.8 million of goods in its inventory at 30 June 2015 which had been supplied by Paul. In addition, on 28 June 2015, Paul processed the sale of $800,000 of goods to Saul, which Saul did not account for until their receipt on 2 July 2015. The in-transit goods reconciliation should be achieved by assuming the transaction had been recorded in the books of Saul before the year end. At 30 June 2015, Paul had a trade receivable balance of $2.4 million from Saul which differed to the equivalent balance in Sauls books due to the sale made on 28 June 2015.

(v) On 30 June 2015, the fair values of the financial asset equity investments of Paul and Saul were $13.2 million and $7.9 million, respectively.

(vi) Pauls policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose, Sauls share price at that date is representative of the fair value of the shares held by the non-controlling interest.

REQUIRED: PREPARE THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR PAUL AS AT 30 JUNE 2015

Paul $'000 Saul $'000 ASSETS Non-current assets Property, plant, and equipment Financial asset equity investments 55,000 11,500 66.500 28,600 6,000 34,600 Current Assets Inventory Trade receivables Bank 17,000 14,300 2.200 33,500 100,000 15,400 10,500 1.600 27.500 62.100 TOTAL ASSETS EQUITY AND LIABILITIES Equity and liabilities Equity Equity shares of $1 each Other component of equity Retained earnings - at July 2014 For year ended 30 June 2015 20,000 4,000 26,200 24,000 74,200 25,800 100.00 20,000 nil 14,000 10,000 44,000 18.100 62.100 Current liabilities TOTAL EQUITY AND LIABILITIES Paul $'000 Saul $'000 ASSETS Non-current assets Property, plant, and equipment Financial asset equity investments 55,000 11,500 66.500 28,600 6,000 34,600 Current Assets Inventory Trade receivables Bank 17,000 14,300 2.200 33,500 100,000 15,400 10,500 1.600 27.500 62.100 TOTAL ASSETS EQUITY AND LIABILITIES Equity and liabilities Equity Equity shares of $1 each Other component of equity Retained earnings - at July 2014 For year ended 30 June 2015 20,000 4,000 26,200 24,000 74,200 25,800 100.00 20,000 nil 14,000 10,000 44,000 18.100 62.100 Current liabilities TOTAL EQUITY AND LIABILITIES