ONE On January 1, 2021, Alto Ltd acquired 90% of the equity interest in Bass Ltd in exchange for 5,400 shares having a fair value of TZS 120,600,000/= on that day. Management elects the option to measure non-controlling interest at fair value and a value of TZS 13,400,000/= is assigned to the 10% non-controlling interest (NCI) [(TZS 120,600,000/.90) 10% = TZS 13,400,000/=]. The following shows the financial positions of the companies before business combination at January 1, 2021. Alto Ltd and Bass Ltd Statements of Financial Position as at January 1, 2021 (before combination) Alto Ltd TZS000 Bass Ltd TZS000 Assets Non-current Assets Patents 0 10,000 Equipment 200,000 50,000 Less: Accumulated depreciation (21,000) (10,000) Total Non-current Assets 179,000 50,000 Current Assets Inventories 22,900 16,100 Accounts receivable (net) 34,200 9,100 Cash 30,900 37,400 Total Current Assets 88,000 62,600 Total assets 267,000 112,600 Liabilities and shareholders equity Non-current Liabilities Bonds payable, 10% 100,000 0 Current Liabilities Accounts payable 4,000 6,600 Total Liabilities 104,000 6,600 Shareholders equity Share capital 115,000 65,000 Retained earnings 48,000 41,000 Total Shareholders equity 163,000 106,000 Total liabilities and shareholders equity 267,000 112,600 At the date of the combination, the fair values of the assets and liabilities of Bass Ltd were determined by appraisal, as follows: IAA MAF-2023 CORPORATE REPORTING (AFG 09214) Page 3 of 16 IAA MAF-2023 Book Value (BV) TZS000 Fair Value (FV) TZS000 Difference between BV and FV TZS000 Bass Ltd Item Cash 37,400 37,400 0 Accounts receivable (net) 9,100 9,100 0 Inventories 16,100 17,100 1,000 Equipment (net) 40,000 48,000 8,000 Patents 10,000 13,000 3,000 Accounts payable (6,600) (6,600) 0 Totals 106,000 118,000 12,000 The equipment has a book value of TZS 40,000,000/= (TZS 50,000,000/= less 20% depreciation of TZS 10,000,000/=). An appraisal concluded that the equipments replacement cost was TZS 60,000,000/= less 20% accumulated depreciation of TZS12,000,000/=, resulting in a net fair value of TZS 48,000,000/=. Required: (a) Calculate net identifiable assets (i.e before goodwill); (b) Calculate total goodwill and goodwill allocated to (i) controlling interest (90%) and (ii) non-controlling interest (10%); (c) Prepare Alto Group Consolidated Statement of Financial Position as at January 1, 2021. QUESTION TW