Show written discussion and calculation to the questions (required). paste your answers into the answer box, explain methodology and calculations.

QUESTION 1: MAGIC PLC Magic Plc is a leading engineering company. On 1 Jan 2020 it acquired 75% of the issued shares of Circus Ltd and gained control. The statements of financial position of the two companies as at 31 December 2020 were as follows: Magic PlcCircus Ltd'000'000Non-current assetsFreehold property 950 570Plant and equipment 780 420Investment in Circus Ltd 1,460Current assetsInventory 670 380Trade receivables 590 475Cash and cash equivalents 650 520TOTAL ASSETS 5,100 2,365Current liabilitiesTrade payables 610 425Non-current liabilitiesDebentures 830 240TOTAL LIABILITIES 1,440 665NET ASSETS 3,660 1,700EquityOrdinary share capital 850 700Share premium 240 170Retained earnings 2,570 830 3,660 1,700 The following information is relevant: 1. The balance of Circus Ltd's retained earnings at 1 Jan 2020 was 590,000. 2. On the date of the acquisition, the fair value of Circus Ltd freehold property was 270,000 in excess of the book values. Circus Ltd does not account for this amount in its own accounts. Magic Plc depreciates its property using the straight line and at 1 Jan 2020, these assets had a remaining useful life of 15 years. 3. On 1 Jul 2020, Circus Ltd sold inventory to Magic Plc at a price of 210,000. Magic Plc sets its selling prices by marking up the cost by 40%. By 31 December 2020, Magic Plc has sold only half of this inventory to third parties. 4. Included in Magic Plcs trade payables is a balance due to Circus Ltd of 51,000. Circus Ltds trade receivables include a balance of 51,000 owing from Magic Plc. 5. Goodwill arising on acquisition is subject to impairment review. For the year ended 31 Dec 2020, the directors estimate that goodwill has been impaired by 44,000. Required: Prepare a consolidated statement of financial position (CSFP) for Magic Plc and its subsidiary as at 31 December 2020. Show written discussion and calculation to the questions (required). paste your answers into the answer box, explain methodology and calculations.