The following are the Statements of Financial Position of Achilles Limited and Troy Limited, as at the 31 December 2021. The companies are major players in the automotive industry. Achilles Limited acquired 80% of the shares in Troy Limited on January 1, 2018 when the retained earnings balance was $264,000. Troy Limited's acquisition consisted of a cash payment of $2,400,000 and a share exchange of 3 shares in Achilles Limited for every 4 shares acquired in Troy Limited. The market price for an Achilles Limited share at that date was $1.80. Only the cash payment related to the acquisition of Troy Limited have been recorded. Statement of Financial Position as at 31 December 2021 Achilles Limited Troy Limited $ 000 $000 $000 $ 000 Non-Current Assets Property 7,200 4,800 Equipment 10,700 1880 Less Depreciation 2,400 8,300 800 1,080 Motor Vehicles 2300 1,200 Less Depreciation 230 2070 400 800 17,570 6,680 Investments Troy Limited 2400 Current Assets Inventory 1240 620 Accounts receivable 900 740 Bank & cash 450 4.990 80 1.440 22,560 8.120 EQUITY & LIABILITES $1 Ordinary shares Retained earnings 15,000 5,000 3,200 1,170 Non-Current Liabilities 4% Debentures Current Liabilities Trade Payables Taxation 3500 1500 780 390 80 60 860 450 22,560 8,120 Additional Information: 1. 2. 3. 4. 5. At the date of the acquisition Achilles Limited conducted a fair value exercise which revealed that property owned by Troy Limited was $800,000 below the carrying value. However, to date no adjustments were made. At December 31 2021, goodwill was impaired by $2,000,000. During the year Achilles Limited sold goods to Troy Limited for $150,000 after charging a mark-up of 50%. At 31 December 2021, 80% of the goods remained unsold. Troy's current account balance with Achilles at the 31 December 2021 was $28,000, which did not agree with Achilles' equivalent receivables due to a payment of $10,000 made by Troy Limited on the 27th of December 2021, which was not received by Achilles Limited until 3 March 2022. Non-Controlling Interest in Troy Limited should be valued at $1.50 per share at acquisition date. 6. On 1 October 2021, Troy Limited transferred equipment to Achilles Limited at a price of $50,000 after adding a mark up of 25%. Achilles Limited depreciated the asset at 10% per annum on cost (on a monthly basis). Required: 1. Prepare the Consolidated Balance Sheet for the Achilles Limited Group as at 31 December (36 marks) 2021. 2. Explain what is an associate company and how it is accounted for under the equity method (4 marks)