Part 2 - Consolidated Financial Statements (33 marks] On 30 June 2017, P Co pays 50,000 cash to acquire 70% of the ordinary shares of S Co. The draft statements of financial position of these two companies as at 30 June 2018 are below: PC0 S Co Assets Property, plant and equipment 400.000 55,000 Investment in s 50,000 Total Non-current Assets 450,000 55,000 Receivables 50,000 5,000 Inventories 50,000 5,000 Bank and Cash 250,000 15.000 Current Assets 350.000 25,000 Total Assets 800.000 80.000 Equity Ordinary Share Capital (1 shares) 500,000 50,000 Retained Earnings 200.000 10.000 700,000 60,000 Liabilities Trade Payables 100.000 20,000 Total Equity and Liabilities 800.000 80,000 The following information is also available: . The fair value of the property, plant and equipment of S Co on 30 June 2018 is 60,000 as opposed to its carrying amount of 55,000. Ignore any depreciation estimates. s Co's retained earnings at 30 June 2017 was 5,000 (this is the value on the date of acquisition). The share capital of P Co and S Co have not changed since the acquisition. P Co estimates that the initial goodwill recognised on the purchase needs to be impaired by 20% and the resulting loss needs to be recognised in the consolidated financial statements as at 30 June 2018. Non-controlling interest in the statement of financial position will be measured using the proportionate share (method 1) of the subsidiary's identifiable net assets. During the year S Co sold P Co goods invoiced at 10,000 which includes 25% mark-up over the original cost of these goods to S Co. P Co still holds 50% of these goods in its inventory . Required: . a) Prepare a consolidated statement of financial position as at 30 June 2018. b) Suppose that on 30 June 2017 P Co pays 50,000 for 70% (35,000 shares out of 50,000 total number of S Co shares) of S Co and the fair value of S Co's net assets was 75,000. If the market price of S Co'shares was 1.20, calculate the goodwill and non-controlling interest on the day of the transaction (30 June 2017), using the full goodwill method. Explain the reasons for the difference in goodwill under the two alternative methods. 4 . c) Explain (without calculations) how your answer would differ if P Co had bought 40% of the shares in S Co for 30,000 rather than the stake of 70% and that P Co has no other means to control the board/management of S Co