Question $1[30$ marks$]$

$1.$ On $1$ October $2020$ P Ltd acquired $30\%$ of the equity shares of A Ltd at a cost of $$7\mathrm{.}50$

per share in cash when the retained earnings of A Ltd stood at $$11,000.$ On $1$ October

$2021,$ P Ltd acquired a further tranche of $30\%$ of the equity shares of A Ltd at a price of

$$9$ per share cash which reflected the fair value of the share price of A Ltd$.$ The fair

value of the identifiable assets and liabilities of A Ltd at $1$ October $2021$ reflected the

firm$$s book values.

$2.$ On $1$ October $2020,$ S acquired $80\%$ of the share capital in SS Ltd for a cash

consideration of $$8,000,000.$

$3.$ On $1$ October $2021$ P Ltd acquired $3$ million equity shares in S Ltd by an exchange of

one share in P Ltd for every $2$ shares in S Ltd plus $$1\mathrm{.}25$ per acquired share in S Ltd$.$ The

market price of each share in P Ltd at the date of acquisition was $$6$ and the market

price of each share in S Ltd at the date of acquisition was $$3\mathrm{.}25.$ It should be noted that

in the books of P Ltd$,$ only the cash consideration of the investment in S was recorded.

In addition, $$500,000$ of professional costs relating to the investment in S Ltd was also

included as part of the cost of the investment.

$4.$ At the date of acquisition, S Ltd had an intangible asset worth $$1,000,000.$ The

intangible asset has an indefinite life and has not suffered any impairment since

acquisition.

$5.$ On $1$ October $2021,$ P Ltd sold an item of plant to S Ltd at its agreed fair value of $$2\mathrm{.}5$

million. Its carrying amount prior to sale was $$2$ million. The estimated remaining life

of the plant at the date of sale was $5$ years.

$6.$ During the year ended $30$ September $2022,$ S Ltd sold goods to P Ltd for $$2\mathrm{.}7$ million at

a mark$-$up of $50\%.$ P Ltd had a third of the goods still in inventory at $30$ September

$2022.$ There were no intra$-$group receivables and payables at $30$ September $2022.$

$7.$ The investments in equity instruments $($other than those in S Ltd and A Ltd$)$ have a fair

value of $$9$ million at $30$ September $2022.$

$8.$ It is group policy to fair value non$-$controlling interest at the date of acquisition only

when positive goodwill exists. Negative goodwill is expected to arise on the effective

equity share which P Ltd acquired in SS Ltd$.$

Advanced Corporate Reporting $$ DFA$3100$Y$(5)$

Page $2$ of $10$

$9.$ The summarised draft statements of financial position of P Ltd$,$ S Ltd and A Ltd at

$30$ September $2022$ are given below:

P Ltd S Ltd SS Ltd A Ltd

$$000$ $$000$ $$000$ $$000$

Non$-$current assets

Property, Plant and equipment $18,40010,40020,00018,000$

Investments in S Ltd and A

Ltd

$24,050$

Investment in SS Ltd $8,000$

Other Equity Investments $7,250$

$49,70018,40020,00018,000$

Current assets

Inventory $6,9003,2004,0003,600$

Trade receivables $3,2001,5001,0007,400$

Total assets $59,80023,10025,00029,000$

Equity and Liabilities

Ordinary shares of $$110,0004,0005,0004,000$

Retained earnings:

At $30\mathrm{.}09\mathrm{.}2021$

$26,800$

$6,000$

$10,000$

$16,000$

Profit for year ended

$30\mathrm{.}09\mathrm{.}2022$

$10,000$

$2,900$

$5,000$

$5,000$

Total equity $46,80012,90020,00025,000$

Non$-$current Liabilities

$7\%$ Loan notes $5,0001,00001,000$

Current Liabilities

Trade payables $8,0009,2005,0003,000$

Total equity and Liabilities $59,80023,10025,00029,000$

Required:

Prepare the consolidated statement of financial position as at $30$ September $2022$ for the

P Group.