Question (3): a) Fortune plc decided to expand by acquiring Blossoming plc on the 1st of January 2021. Fortune plc paid 6,800,000 to acquire 100% of Blossoming's equity. The statement of financial position of Blossoming plc as of 31st of December 2020 was as follows: 000 Blossoming plc Statement of financial position As at 31 December 2020 000 Non-current assets: Property, plant and equipment (Net) Current assets Total Assets Equity Liabilities: Non-current Liabilities 1,000 Current Liabilities 1,200 5,400 1,800 7,200 5.000 2,200 7,200 Total Equity and Liabilities At the date of acquisition, an appraisal of the assets of Blossoming plc indicated that the fair market value of the identifiable net assets of Blossoming plc was 5,600,000. On 31 December 2021, Blossoming's reported the following information in its statement of financial position: Non-current assets (including goodwill recognised on purchase) Current assets Non-current Liabilities Current Liabilities Net Assets 000 4,800 1,600 (1,000) (1,400) 4,000 Required: 1. Calculate the amount of goodwill (if any) as a result of the acquisition of Blossoming plc by Fortune plc on 1 January 2021. 2. The recoverable amount of Blossoming plc by the end of December 2021 was 4,200,000. Calculate the impairment loss (if any) to be recorded on 31 December 2021. 3. Re-calculate (2), assuming that the recoverable amount of Blossoming plc as at 31 December 2021 is 3,600,000. Prepare the required journal entry to record the impairment loss (if any) on 31 December 2021. You are required to show all workings. (20 marks) b) Explain the main classes of shares and their characteristics. Word count: 500 words maximum] (15 marks) c) Explain the reasons for share issuance and differentiate between the methods of raising equity capital. What journal entry is required to record the issuance of ordinary shares either at nominal value or at a price that exceeds the nominal value? Word count: 500 words maximum] (15 marks) (Total 50 marks)