Question 1 The Statements of Profit and Loss for the Saint Group is presented below: On October 1, 2020, Saint acquired 180 million shares of Annie 300 million $1 equity shares. The acquisition was achieved through a share exchange of one share in Saint for every three shares in Annie and cash of $252 million. At that date the stock market prices of Saint and Annie shares were $8 and $5 per share respectively. The retained earnings of Annie brought forward as of 1 April 2020 were $240 Million. The summarised Statement of Profit & Loss and other Comprehensive Income for the companies for the year ended 31 March 2021 are: Saint Annie $000 $ 000 Revenue 1240,000 620,000 Cost of Sales (800,000) (300,000) Gross Profit 440,000 320,000 Distribution Costs (80,000) (40,000) Administrative Expenses (72,000) (50,000) Profit before Interest and Tax 288,000 230,000 Finance Costs (4,000) (11,200) Investment Income 10,000 3,200 Profit before Tax 294,000 222,000 Taxation (90,000) (62,000) Profit for the Year 204,000 160,000 Other Comprehensive Income: Gain/(Loss)on Revaluation of Land (Notes i and ii) (4,400) 6,000 Total Comprehensive Income for the Year 204,000 160,000 Additional Information: The following information is relevant: i. A fair value exercise conducted on October 1, 2020, concluded that the carrying amount of Annie net assets were equal to their fair values with the following exceptions: a. Fair value of Annie land was $4 M more than its carrying amount. b. An item of plant had a fair value of $12 M more than its carrying value. The plant had a remaining life of 4 years at the date of acquisition. Plant depreciation is charged to Cost of Sales. ii. Saints group policy is to revalue land to market value at the end of each accounting period. Prior to its acquisition, Annie land had been valued at historical cost, but it has adopted the group policy since its acquisition. In addition to the fair value increase in Annie land of $4 M (note I), it had increased by a further $2 M since its acquisition. iii. After acquisition Saint sold goods to Annie for $40 Annie had one fifth of these goods still in inventory as of 31 March 2021. All sales had a mark-up of 25% on cost. iv. Saints policy is to value Non-Controlling Interest at date of acquisition at its fair value. Share price of Annie as of October 1, 2020, is representative of the fair value of shares held by NCI. v. Assume revenue and profits accrue evenly throughout the year. Required: A. Calculate the Consolidated Goodwill as of October 1, 2020. (5 marks) B. Prepare the Consolidated Profit or Loss and other comprehensive Income of Saint Group for the year ended 31 March 2021. (12 marks) C. Explain the concept of equity accounting as it relates to group accounts.