The extract of statement of financial position for the year ended $30$ June $2024$ for Pear Ltd and Sand Ltd

are as follows:

Extract of statements of financial position for the year ended $30$ Jume $2024$

On $01$ July $2023,$ Pear Ltd acquired $900,000$ ordinary shares of Sand Ltd and as a result, Pear Ltd holds

$75\%$ shares in Sand Ltd$.$ The purchase consideration was as follows:

Cash paid $$1,900,000$

A deferred cash settlement to be paid in six years' time of $$1,500,000$

By an exchange of two shares in Pear Ltd for every five shares in Sand Ltd$.$ The market price of

Pear Ltd share at the date of acquisition was $ $2\mathrm{.}50$ and the market price of each Sand Ltd share

at the date of acquisition was $$3\mathrm{.}25$

Legal fees associated with the acquisition were $$50,000.$

The discount rate of Pear Ltd is $10\%.$

$($a$)$ Calculate the fair value consideration $($Costs of investment$)$ transferred to acquire control of

Sand 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$).$

$[10$ Marks$]$

On the acquisition date, the retained earnings of Sand Ltd stood at $ $150,000$ and share capital was $

$1,200,000.$ Sand Ltd had a Patent which has not been recognized in its financial statements. The directors

of Pear Ltd are of the opinion that the Patent should be accounted. The Patent had a fair value of $

$600,000$ and a remaining term six years to go as from the date of acquisition. The carrying value of

Property, Plant and Equipment were in excess by $$800,000$ on the acquisition date. Property, Plant and

Equipment had a lifetime of four years at the acquisition date. Included within the intangible assets of

Sand Ltd $($at the acquisition and reporting date$)$ is goodwill of $$50,000$ which arose on the purchase of

the trade and assets of a sole$-$trader business.

$($b$)$ Calculate the net assets of Sand Ltd at the date of acquisition $(01$ July $2023)$ and at the reporting

date $(30$ June $2024).$

$[10$ Marks$]$

Goodwill has been impaired by $$200,000$ at the reporting date $(30$ June $2024).$

$($c$)$ Calculate the goodwill using the proportion method at the date of acquisition $(01$ July $2023).$

$[5$ marks$]$

$($d$)$ Calculate the non$-$controlling interest $($NCI$)$ as at $30$ June $2024.$

$[2$ Marks$]$

Pear Ltd has recently appointed an accountant, Mr$.$ Good, following the resignation of the previous

group accountant. When Mr$.$ Good was preparing the group accounts for the year ended $30$ June $2024,$

he found that only the cash consideration of $$1,900,000$ has been accounted. The par value of each

ordinary share for Pear Ltd is $$1.$

$($e$)$ Calculate the group retained earnings as at $30$ June $2024.$

$[3$ Marks$]$

$($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 $30$ June $2024$ showing

clearly how the deferred payment and shares exchange should be accounted.

$[10$ Marks$]$