On 1st October 2020 Uchumi Ltd acquired 60% of the equity share capital of Mateso Ltd at cost of Sh.12,800.
On this date the retained earnings of Mateso Ltd were Sh.5,000.
Below are the financial statements for the two companies for the year ended 31st March 2021
Income statement for the year ended 31st March 2021
			Uchumi	Mateso
			Sh'000'	Sh'000'
Revenue			85,000	42,000
Cost of sales		63,000	32,000
Gross profit		22,000	10,000
Distribution costs		2000	2000
Administrative expense	6000	3200
Finanace costs		300	400
Profit before tax		13,700	4,400
Income tax		4,700	1,400
Profit for the year		9,000	3,000
Statement of financial position
NON-CURRENT ASSETS
PPE			30,450	9,450
Property			10,150	3,150
Investments		12,800
			53,400	12,600
CURRENT ASSETS
Inventory			6,040	2,500
Receivables		5,960	2,450
Bank			4,000	1,650
TOTAL ASSETS		69,400	19,200
EQUITY & LIABILITIES
Share capital		11,600	4,000
Share premium		11,200
Retained earnings		35,400	6,500
NON CURRENT LIABILITIES
10% Loan notes		3,000	4,000
CURRENT LIABILITIES
Trade payables		6,150	3,525
Accruals			2,050	1,175
TOTAL LIABILITIES		69,400	19,200
Additional Information
1. As at the acquisition date fair values of Mateso Ltd assets were equal to their carrying amount except for an item
of plant , which had a fair value of sh,1 million in excess of the carrying amount. The plant had a remaining useful
life of 5 years as at the acquisition date.
2. Sales of Mateso Ltd to Uchumi Ltd in the post acquisition period amounted to sh.4 million. Matusi ltd made mark up
of 40%. Sh,1.4 million of these goods at cost were still included in inventory by closing date.
Mateso Ltd trade receivables include sh,400,000 due from Uchumi Ltd which did not agree with the corresponding
payables. This was due to cash paid from Uchumi Ltd not yet received by Mateso ltd.
3. Uchumi Ltd has A policy of accounting for any non controlling interest at fair value. Fair value of goodwill
attributable to non controlling interest in Mateso ltd was sh.1.2 million.
Required: Consolidated financial statements.