Trifles Ltd acquired 280,000 shares in Bamburg Ltd on 01 July 2019 and as a result Trifles Ltd has a control of 80% in Bamburg. The purchased consideration transferred by Trifles Ltd in exchange of the shares in Bamburg Ltd was as follows: (i) Cash paid of $ 565,000 (ii) Cash to be paid in four year time is $ 500,000 (iii) Share exchange of two shares in Trifles Ltd for every seven shares in Bamburg Ltd. The market price of Trifles Ltd at the date of acquisition was $ 3. The par value of Trifles Ltd ordinary shares is $ 0.5 each. Legal fees associated with the acquisition were $ 75,000. The cost of capital of Trifles Ltd is 15%.

Fair Value is $ 1,090,877

Bamburg Ltds retained earnings at the date of acquisition was $ 135,000. No ordinary shares were issued/ redeemed by the subsidiary since acquisition. The group used the proportion of the net assets of the subsidiary company to measure non-controlling interest. Bamburg Ltd holds a patent which has not been recognized in its financial statements. The directors of Trifles Ltd are of the opinion that the patent should be accounted. The patent had a fair value of $ 125,000 and a remaining term four years to go as from the date of acquisition. With regards to Bamburg Ltds Property and Plant, it is noted that the asset had a lifetime of five years at the acquisition date and the carrying value of Property and Plant was greater than the fair value by $ 40,000 on the acquisition date. Included within the intangible assets of Bamburg Ltd is goodwill of $ 5,000 which arose on the purchase of the trade and assets of a sole-trader business.

(i) Calculate the net assets of the subsidiary at the acquisition date and reporting date (30 June 2020). [11 Marks]

(ii) Calculate the goodwill at acquisition date. [2 Marks]

(iii) Calculate the group retained earnings as at 30 June 2020. [3 Marks]