The following are the Statements of Financial Position of Apex Limited, Beta Limited and Gore Limited, as at the 31 December 2021. The three companies are major players in the automotive industry. Apex Limited acquired 70% of the shares in Beta Limited on January 1, 2020 when the retained earnings balance was $64,000. Beta Limited's acquisition consisted of a deferred cash payment of $1,700,000 and a share exchange of 3 shares in Apex Limited for every 4 shares acquired in Beta Limited. The deferred cash payment was to be made on 1 January 2024 and the relevant cost of capital is 15%. The market price for an Apex Limited share at that date was $5.90. The transactions related to the acquisition of Beta Limited have not been recorded. On 1 October 2021 Apex Limited acquired 300,000 shares in Gore Limited for cash at a price of $3.10 per share. At the date of acquisition, the retained earnings of Gore Limited totaled $104,000 Statement of Financial Position as at 31 December 2021 Apex Limited Beta Ltd $ 000 $000 $000 $ 000 Gore Ltd $000 $000 Non-Current Assets Land 5,800 2,800 890 Equipment 2,792 880 400 Less Depreciation 108 2,684 70 810 72 328 Motor Vehicles 1200 1,300 610 Less Depreciation 240 960 210 1,090 130 480 9,444 4.700 1,698 Investments Gore Limited 930 Current Assets Inventory 240 150 90 Accounts receivable 480 240 48 Prepayments 48 42 12 Bank & cash 186 1,884 245 677 78 228 11,328 5.377 1.926 EQUITY & LIABILITES $1 Ordinary shares 5,820 2,000 1000 Retained earnings 1270 408 214 Non-Current Liabilities 4% Debentures 3,441 2,577 478 Current Liabilities Trade Payables 580 254 120 Taxation 217 138 114 797 392 234 11,328 5,377 1.926 QUESTION 1 (continued) Page 3.of.9 Additional Information: 1. At the date of the acquisition the directors of Apex Limited determined that the fair market value of land owned by Beta Limited was $2,500,000, however no adjustments were made. 2. At December 31 2021, goodwill was impaired by $900,000. 3. 4. 5. 6. 7. During the year Apex Limited sold goods to Beta Limited for $327,600 after charging a mark-up of 30%. At 31 December 2021, 70% of the goods were sold. On October 1 2021, Beta transferred a motor vehicle to Apex Limited at a price of $600,000, the motor vehicle was new and cost Beta Limited $560,000. Apex Limited depreciated the motor vehicle at 20% of the cost to them on a monthly basis. Non-Controlling Interest in Beta Limited should be valued at $5.20 per share at acquisition date. At year end the investment in Gore Limited is determined to be impaired by 15% of its cost price. At the 31 December 2021 the accounts receivable balance of Beta Limited included an amount owing from Apex Limited of $30,000. Apex Limited has paid $16,000 which is in transit to Beta Limited.