Question (100 marks) P Company is a manufacturer of sportswear founded two decades ago. Y Company is a manufacturer of casual wear and is renowned for its high quality of materials used in its production. Because of its expansion of business, P Company acquired 80% ownership interests of Y Company on 1 January 2019. Z Company is a retailer of contemporary fashion established ten years ago. For the sake of effectively launching the casual wear products in the target market, Y Company acquired 70% ownership interests of Z Company on 1 April 2020. X Company is an advertising company which specializes in the promotion of trendy style clothing. On 1 January 2020, P Company acquired 25% interests of X Company. The details of acquisition of X Co, Y Co, and Z co are shown below: Date of acquisition Percentage acquisition by P Co X Co 1 January 2020 25% Y Co Z Co 1 January 2019 80% 1 April 2020 Percentage acquisition by Y Co 70% Shareholder's equity at date of acquisition: Share capital Retained earnings (RE) $ 300,000 600,000 $ 1,200,000 1,350,000 $ 900.000 $ 2,550,000 Fair value of non-controlling $ 750,000 510,000 $ 1,260,000 interests (NCI) at acquisition date: $ 600,000 $422,400 The fair value (FV) and book value (BV) of net identifiable assets of each company at the date of acquisition are shown below: X Co Y Co Z Co Book value Fair value Book value Fair value Book value Fair value $ $ Inventory $ 330,000 $ 480,000 $ 150,000 $ 135,000 Intangible assets Other net assets 900,000 Net identifiable assets 900.000 450,000 900,000 1,350,000 2,220,000 2,220,000 1,110,000 1,110,000 2,550,000 2,700,000 1,260,000 1,245,000