Q7 (12 marks) On 1 January 2019, Company P acquired 70% of the 100,000 outstanding common stock of Company S by paying $7,000,000 in cash. On the date of the acquisition, the remaining 30% of the shares was traded at $60 per share. The fair value of the identifiable net assets of Company S on the acquisition date was qual to their book value and was $6,000,000. During 2019, Company P reported a net income of $800,000, while Company S reported a net income of $400,000 During 2019 Company S sold inventory costing $50,000 to Company P at a markup of 60% of cost. At the end of 2019, 25% of that inventory remained unsold by Company P. Company P expects to sell the inventory to outside parties during 2020. By the end of 2019 and before the preparation of the consolidated ncial statements, Company S was involved in a legal suite which resulted into an extremely negative market view of the company. Based on qualitative analysis, Company P determined that it is likely that the fair value of Company S may be lower than its carrying value. The company determined that there was $500,000 impairment loss related to the Goodwill arising from the Acquisition of Company S. Required: 1. Calculate the consolidated net income showing clearly the following: 1. II. Income attributable to non-controlling interest for 2019 2. Calculate the consolidated goodwill at 31 December 2019. DONORER, SA Q7 (12 marks) On 1 January 2019, Company P acquired 70% of the 100,000 outstanding common stock of Company S by paying $7,000,000 in cash. On the date of the acquisition, the remaining 30% of the shares was traded at $60 per share. The fair value of the identifiable net assets of Company S on the acquisition date was qual to their book value and was $6,000,000. During 2019, Company P reported a net income of $800,000, while Company S reported a net income of $400,000 During 2019 Company S sold inventory costing $50,000 to Company P at a markup of 60% of cost. At the end of 2019, 25% of that inventory remained unsold by Company P. Company P expects to sell the inventory to outside parties during 2020. By the end of 2019 and before the preparation of the consolidated ncial statements, Company S was involved in a legal suite which resulted into an extremely negative market view of the company. Based on qualitative analysis, Company P determined that it is likely that the fair value of Company S may be lower than its carrying value. The company determined that there was $500,000 impairment loss related to the Goodwill arising from the Acquisition of Company S. Required: 1. Calculate the consolidated net income showing clearly the following: 1. II. Income attributable to non-controlling interest for 2019 2. Calculate the consolidated goodwill at 31 December 2019. DONORER, SA