Question 3 (22 marks) Meek's Penguin Cog (MPC) is a Canadian company that reports t accordance with IFRS. On December 31, 2006, MPC pae $720.000 e 70% of Zoebug Supply Inc. is (251) outstanding common shares. 2 statement of financial position as at December 31, 2007, and is statement of comprehensive income for the year ended December 31, 2017, w Zoebug Supply Inc. Cash Statement of financial position Accounts receivable and ca Inventory Note receivable Land 150 Building Equipment (e) Trademark Accounts payable and accruals Long-term debt Common shares Total bites and equity Zoebug Supply Inc. Statement of comprehensive income For the year ended December 31, 20 Sales revenue Cost of goods sold Gross profit 000 Sales, general, and administrative expenses Depreciation and amortization expense Other income Earings before income tax expense The fair value of 25's identifiable net assets at time of action differed from its book value as indicated below in $000 Book value Dec. 31, Fair value remaining use Dec. 31, 2006 2006 Estimated residual value Inventory 183 213 NA Land 220 390 NA Building (net) 240 200 Equipment (net) 160 176 Trademark 100 300 Long-term debt 000 630 jij 50 NA Additional information: 1. Both companies pay income tax at a rate of 30% 2. Both companies use the FIFO co-ownsumption to ens 3. Both companies depreciate their depreciable assets on a tightness 4. The fair value inement on the long-term debt is amorted using th method 5. For impairment testing purposes MPC established that is a CGU MPC tested the CGU for impairment on December 31, 2017 Goodwill as culated using the identifiable net assets (NA) method was found to be impaired by $18.000 6. On December 31, 2017, 25 sold land to MPC for $155.000 25 Sme of sale was $140,000. which was the same as the estimated fare at acquisition date of the subsidiary (December 31, 200 in consideration of the transfer, MPC paid $5,000 cash and signed a note payable t balance. The note is payable in full on December 31, 20x% annum, payable annually is first payable on December 31, 2008 This is the market rate of interest for a note of this length $150,000