The summarized statement of Financial Position of KISUMU Limited and KAKAMEGA LTD at June 2014 are as follows

KISUMU LTD KAKAMEGA LTD

KSH KSH

Fixed assets book value 540,000 414,000

Investment in KAKAMEGA 675,000

Current assets: Stocks 288,000 117,000

Debtors 243,000 153,000

Bank 9,000 18,000

1,755,000 702,000

FINANCING

Share capital (Ksh 1 O/shares) 900,000 450,000

Retained profits 630,000 108,000

1,530,000 558,000

Liabilities 225,000 144,000

1,755,000 702,000

KISUMU limited purchased the entire share capital of KAKAMEGA limited on June 30^th 2014.

The fixed assets of KAKAMEGA limited are considered to possess a fair value of Ksh 486,000, debtors Ksh 162,000, Stocks 108,000 with no material differences expected on the remaining assets.

YOU ARE REQUIRED TO

1. Calculate the goodwill arising on consolidation using

1. Assets method (5 Marks)
2. Equity method (5 Marks)

2. Prepare the consolidated statement of financial position of KISUMU limited and her subsidiary at June 30th 2014 accordingly (10 Marks)

Ignore depreciation