On 2020 January 01, Guardian PLC acquired 60 000 of the 100 000 shares in ACCESS. Draft statements of profit or loss and other comprehensive income of both companies at 2020 December 31 are shown below:

Guardian ACCESS

$000 $000

Revenue 58 000 41 000

Cost of sales (20 000) (25000)

Gross profit 38 000 16 000

Other income dividend received from ATL 2 000 -

Distribution costs (4000) (1 800)

Administrative expenses (8000) (4 200)

Finance costs (2500) (1 300)

Profit before tax 25 500 8 700

Income tax expense (3400) (1900)

Profit for the year 22 100 6 800

Additional information:

i. At the date of acquisition, the fair values of ACCESS assets were equal to their carrying amounts with the exception of a building that had a fair value of $1M in excess of its carrying amount. As at same date also, the building had a remaining useful life of 20 years. Building depreciation is charged to administrative expenses.

ii. Sales from Guardian to ACCESS were $6M during the post acquisition period. Guardian marks up all sales by 20%. At the reporting date this entire inventory remained in ACCESS warehouse.

iii. Despite the propertys revaluation, Guardian has concluded that goodwill in ACCESS has been impaired by $500 000. This is also charged to administrative expenses.

iv. It is Guardians policy to value non-controlling interest at fair value. Prepare the consolidated statement of profit or loss and other comprehensive income for the year ended 2020 December 31.

NB Notes and workings MUST be clearly shown. (20 marks)