rifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July 2019 and as a result Trifles Ltd has a control of 80% in Bamburg. The purchased consideration transferred by Trifles Ltd in exchange of the shares in Bamburg Ltd was as follows:

(i) Cash paid of $ 565,000

(ii) Cash to be paid in four year time is $ 500,000

(iii) Share exchange of two shares in Trifles Ltd for every seven shares in Bamburg Ltd.

The market price of Trifles Ltd at the date of acquisition was $ 3.

Legal fees associated with the acquisition were $ 75,000. The cost of capital of Trifles Ltd is 15%

Bamburg Ltds retained earnings at the date of acquisition was $ 135,000. No ordinary shares were issued/ redeemed by the subsidiary since acquisition. The group used the proportion of the net assets of the subsidiary company to measure non-controlling interest. Bamburg Ltd holds a patent which has not been recognized in its financial statements. The directors of Trifles Ltd are of the opinion that the patent should be accounted. The patent had a fair value of $ 125,000 and a remaining term four years to go as from the date of acquisition. With regards to Bamburg Ltds Property and Plant, it is noted that the asset had a lifetime of five years at the acquisition date and the carrying value of Property and Plant was greater than the fair value by $ 40,000 on the acquisition date. Included within the intangible assets of Bamburg Ltd is goodwill of $ 5,000 which arose on the purchase of the trade and assets of a sole-trader business

(iii) Calculate the group retained earnings as at 30 June 2020. [3 Marks]

Extract of statement of financial position for the year ended 30 June 2020 Equity and liabilities Trifles Bamburg $ 000 $ 000 Share capital ($ 0.5 Each) 325 175 Share premium 200 100 Retained earnings 200 225 Non current liabilities 125 50 Current liabilities 100 10 Extract of statement of financial position for the year ended 30 June 2020 Equity and liabilities Trifles Bamburg $ 000 $ 000 Share capital ($ 0.5 Each) 325 175 Share premium 200 100 Retained earnings 200 225 Non current liabilities 125 50 Current liabilities 100 10