PART A$.$ Prepare Consolidated Financial Statements

In this part, you are given the relevant information about a hypothetic case of business

combination between Alpha Inc. and Beta Inc..

On January $1,2021,$ Alpha Inc. $(\text{'}$Alpha$\text{'})$ acquired control over Beta Inc. $(\text{'}$Beta$\text{'})$ by acquiring

$80\%$ of the shares of Beta for $$5,000.$ On the date of the acquisition, the equity in Beta

comprised the following:

This equity reflected the fair value of all the assets and liabilities of Beta, with the exception

of land, which had a fair value of $$250$ in excess of the carrying amounts, respectively.

The following additional information is available:

During the year ended December $31,2022,$ Beta sold inventory to Alpha at a price of $$600.$

This inventory had cost Beta $$460.$ As of December $31,2022,$ Alpha still had $45\%$ of the

inventory in stock.

During the year ended December $31,2023,$ Alpha sold inventory to Beta at a profit of $$400.$

This inventory had cost Alpha $$1,000.$ As of December $31,2023,$ Beta had all these

inventories in stock.

On January $1,2022,$ Beta sold an equipment to Alpha at a profit of $$1,000.$ Alpha has since

depreciated the equipment on a straight$-$line basis assuming a useful life of five years.

During the year ended December $31,2023,$ Beta rented office space from Alpha at a cost

of $$600.$ As of December $31,2023,$ Beta still owed $$100$ of the rent.

During the year ended December $31,2023,$ Beta declared and paid a dividend of $$500.$

The impairment tests on cash$-$generating units at the end of $2021,2022$ and $2023$ revealed

that the recoverable amount of goodwill is $$450,$$$350,$ and $$750$ respectively.

Assume that the corporate tax rate is $40\%$ and impairment loss on goodwill is not tax

deductible.

Both companies have December $31$ year end.

The financial statements of Alpha and Beta for the fiscal year ended December $31,2023$

are provided in the Excel spreadsheet.

Assume that Beta is Alpha's only subsidiary and the NCI equity is valued under Identifiable

Net Asset $($INA$)$ method. Please use the information above and data provided in the attached

Excel sheet to prepare the consolidated Income Statement for the fiscal year ended on

December $31,2023,$ consolidated Statement of Retained Earnings and Balance Sheet as at

December $31,2023.$