q 5

QUESTION FIVE Parmar limited purchased a 60% holding in Sarvar limited on 1 April 2020 for Shs. 6.1m when the retained earnings of Sarvar limited were Shs. 3.6m and a 30% holding in Amor limited on 1 October 2021 for Shs. 4.7m when its retained earnings were Shs. 6.2m. The fair value of the non-controlling interest (NCI) was Shs. 3.9m at the acquisition date. The fair value of the net assets in Sarvar limited was the same as their book values. At 31 March 2022 the consolidated statement of financial statement of Parmar limited, Sarvar limited and Amor limited were as follows: Parmar Sarvar Amor Shs '000' Shs '000' Shs '000' Assets Non-current assets Property, plant and equipment 37,500 24,500 21,000 Investments 45,000 82,500 24,500 21,000 Current assets Inventory 10,000 9,000 5,000 Trade receivables 6,500 1,500 3,000 16,500 8,000 Total assets 99,000 35,000 29,000 Equity and liabilities Equity Equity shares of Shs. 1 each 8,000 Share premium Retained earnings- at 1 April 2020 Profits for the year ended 31 March 2021 10,500 5,000 25,000 19,800 16,200 11,000 72,000 16,500 1,000 25,500 15,000 6,000 26,000 2,000 7,500 7,500 35,000 Non-current liabilities 7% loan notes 14,500 Current liabilities Contingent consideration 4,200 Other current liabilities 8,300 12,500 3,000 Total equity and liabilities 99,000 Impairment of goodwill was Shs. 800,000 and that of investment in Associates was Shs. 360,000 at 31 March 2022. Required: Present the consolidated statement of financial position of Parmar limited as at 31 March 2022. (Total: 20 marks) 3,000 29,000