on 1st april2017 prentice acquired 60% of the equity share capital of sontic in a share exchange of two shares in prentice for three in sontic.the issue of shares has not yet been recorded by prentice at the date of acquisition,shares in prentice had a market value of $6 each. below are summerised draft financial statement of both companies.

statement of profit or loss for the year ended 30 September 2017

prentice sontic

$000 $000

revenue 85000 42000

cost of sales 63000 32000

gross profit 22000 10000

distribution costs (2000) (2000)

administration costs (6000) (3200)

finace costs (300) (400)

profit before tax 13700 4400

income tax (4700) (1400)

profit after tax 9000 3000

statement of financial position as at 30th September 2017

ASSETS

non current assets 40600 12600

property plant &equip 16000 6000

total current assets 56600 19200

EQUITY AND LIABILITIES

equity shares of $1 10000 4000

returned earnings 35400 6500

total 45400 6500

NON CURRENT LIABILITIES

10% loan notes 3000 4000

current liabilities 8200 4700

total equity 56600 19200

the following information is relevant:

1. at the date of acquisition, the fair value of sontic's assets were equal to their carrying amounts with the exception of an item of plant which had a fair value of $2 million in excess of its carrying amount. it had a remaining life of five years at the date (straight line method depreciation is used) sontic has not adjusted the carrying amount of its plant as a result of the fair value exercise

2.sales from pretice in the post acquisition period were $8 million sontic made a mark up on cost of 40% on these sales. prentice had sold $5.2 million (at cost to prentice)of these goods by 30 September 2017. 3. sontic's trade receivables at 30 September 2008 include $600000 due from prentic which did not agree with prentic's corresponding trade payables. this was due to cash in transit of $200000 from prentice to sontic, both companies have positive bank balance

3.other than where indicated , statement of profit or loss items are deemed to accrue evenly on a time basis 5. prentice has a policy of accounting for any non controlling interest at fair value . the fair value of the non controlling interest at the acquisition date was $5.9 million

REQUIRED

(a) prepare the consolidated statement of profit or loss for prentice for the year ended 30 September 2017

(b)prepare the consolidated statement of financial position as at 30 sept 2017