The following are the financial statements of White and its subsidiary Brown as at 30 September 20X9

The following information is also available:
(i) White purchased its ordinary shares in Brown on 1 September 20X4 when Brown had credit balances on reserves of £0.5 million and on retained earnings of £1.5 million.
(ii) At 1 September 20X8 goodwill on the acquisition of Brown was £960,000. The impairment review at 30 September 20X9 reduced this to £800,000.
(iii) During the year ended 30 September 20X9 White sold goods which originally cost £12 million to Brown and were invoiced to Brown at cost plus 40%. Brown still had 30% of these goods in inventor y as at 30 September 20X9.
(iv) Brown owed White £1.5 million at 30 September 20X9 for goods supplied during the year.


Required:
(a) Calculate the goodwill arising at the date of acquisition.
(b) Prepare the Consolidated Statement of Income for the year ended 30 September20X9.

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Statement of income for the year ended 30 September 20X9 Statements of financial position as at 30 September 20X9 White Brown £000 White Brown E000 | E000 Sales revenue 245,00095,000 Non-current assets: Cost of sales (140,000) (52000) Property, plant& equipment 10,000 40,000 Gross profit Distribution costs Admin expenses Profit from operations 38,000 20,000 Inventory 05,000 43,000nvestments 21 million (12000) (10,000)shares in Brown (55,000) (13,000)Current assets: 24,000 13,360 3,890 14,640 6,280 Dividend from Bown 7000 Trade receivables & dividend 45,000 20,000 (13,250) ,000) Bank Profit before tax receivable 3,500 2,570 165,500 52,740 ax Net profit for the year 31.750 15,000 uity & reserves: Ordinary shares of El each 100,000 30,000 ,200 1,000 27,300 9,280 136,500 40,280 Reserves Retained earnings Current liabilities: Trade Payables Dividend dedared 9,000 2,460 20,000 10,000 165,500 52,740