Question $2(25$ marks$)$

$2$a$.)$ EF$,$ in addition to its other holdings, acquired a $30\%$ stake in the $100,000$ $$1$ ordinary shares of SR on $1$

January $20$X$1$ for $$50,000.$ At acquisition, SR$\text{'}$s retained earnings were $$22,000.$ During the year ended $31$

December $20$X$4,$ SR sold goods to EF for $$10,000$ at a margin of $20\%.$ As at $31$ December $20$X$4,$ a quarter of

these goods had been sold on to third parties. The retained earnings of the EF group $($excluding SR$)$ and SR at

$31$ December $20$X$4$ were $$390,000$ and $$90,000$ respectively. The investment in SR was impaired by $$2,920$ by

$31$ December $20$X$4.$ What are the consolidated retained earnings of the EF group $($incorporating SR$)$ at $31$

December $20$X$4?$ Give your answer to the nearest $$.$

$2$b$.)$ MN acquired $30\%$ of the share capital of TG for $$75,000$ on $1$ July $20$X$8.$ MN was able to exercise

significant influence over TG from that date. During the year to $30$ June $20$X$9,$ TG made a profit for the year of

$$270,000$ and paid a dividend of $$50,000.$ At $30$ June $20$X$9,$ the investment in the associate was considered to

be impaired by $10\%.$ What amount will appear in the consolidated statement of financial position of MN at

$30$ June $20$X$9$ in respect of its investment in TG$?$ Give your answer to the nearest $$.$

$2$c$)$ On $1$ January $20$X$2$ AD purchased $40\%$ of the equity share capital of BL for $$60,000.$ At this date, the

reserves of BL stood at $$30,000.$ During the year ended $31$ December $20$X$4,$ AD sold goods to BL for $$10,000,$

and these goods were still in inventory at the year end. AD makes a gross profit margin of $25\%$ on intra$-$group

sales. The statement of financial position of BL at $31$ December $20$X$4$ showed the following:

$$\text{'}000$

$$000$

Net assets $320$

Share capital $100$

Reserves $220$

TotaL $320$

At what amount should AD's interest in BL be stated in its consolidated statement of financial position at

$31$ December $20$X$4?$ Give your answer to the nearest $$\text{'}000.$