The extract of statement of financial position for the year ended 31 December 2022 for Peridot Ltd and Slate Ltd are as follows:

Extract of statement of financial position for the year ended 31 December 2022

Equity and liabilities Peridot Ltd Slate Ltd Equity $ $ Share capital ($ 1 Each) 731,250 630,000 Share premium 450,000 - Retained earnings 393,750 506,250 Liabilities Non current liabilities 281,250 112,500 Current liabilities 225,000 22,500

On 01 January 2022, Peridot Ltd acquired 504,000 ordinary shares of Slate Ltd and as a result, Peridot Ltd holds 80% shares in Slate Ltd. The purchase consideration was as follows: Cash paid $ 650,000 A deferred cash settlement to be paid in five years time of $ 250,000 By an exchange of three shares in Peridot Ltd for every five shares in Slate Ltd. The market price of Peridot Ltd share at the date of acquisition was $ 2.5 and the market price of each Slate Ltd share at the date of acquisition was $ 3.25 Legal fees associated with the acquisition were $ 105,000. The discount rate of Peridot Ltd is 11 %.

(a) Calculate the fair value consideration (Costs of investment) transferred to acquire control of Slate Ltd at the date of acquisition. Your answer should include a brief explanation if any of the above issue(s) is/are not required to be accounted in your working(s).

On the acquisition date, the retained earnings of Slate Ltd stood at $ 217,500 and share capital was $ 630,000. Slate Ltd had developed an innovative software that has not been recognized in its financial statements. The directors of Peridot Ltd are of the opinion that the software should be accounted. The software had a fair value of $ 425,000 and a remaining term four years to go as from the date of acquisition. The carrying value of Plant and equipment was in excess by $ 90,000 on the acquisition date. Plant and equipment had a lifetime of three years at the acquisition date. Included within the intangible assets of Slate Ltd (at the acquisition and reporting date) is goodwill of $ 15,000 which arose on the purchase of the trade and assets of a sole-trader business.

(b) Calculate the net assets of Slate Ltd at the date of acquisition (01 January 2022) and at the reporting date (31 December 2022). Goodwill has been impaired by $ 75,000 at the reporting date (31 December 2022).

(c) Calculate the goodwill using the proportion method at the date of acquisition (01 January 2022).

(d) Calculate the non-controlling interest (NCI) as at 31 December 2022.

Peridot Ltd has recently appointed an accountant, Mr Shale, following the resignation of the previous group accountant. When Mr Shale was preparing the group accounts for the year ended 31 December 2022, he found that only the cash consideration of $ 650,000 has been accounted. The par value of each ordinary share for Peridot Ltd is $ 1.

(e) Calculate the group retained earnings as at 31 December 2022.

(f) Prepare an extract of equity (Ordinary shares, Share premium, Retained earnings and NCI) and liabilities section of the consolidated statement of financial position as at 31 December 2022 showing clearly how the deferred payment and shares exchange should be accounted.