QUESTION $1(35$ Marks$)$ The following represents the abridged financial statements of Tesco Limited and its subsidiary Diageo Limited. STATEMENT OF FINANCIAL STATEMENT AS AT $31$ DECEMBER $2023$ Tesco Ltd R Diageo Ltd R ASSETS Non $$ current assets Property, plant and equipment $630000452000$ Investment in Diageo Ltd: $96000$ shares at fair value $240000-$ Loan to Diageo Ltd $160000-$ Current assets $886000790400$ Inventories $350000308000$ Trade and other receivable $536000434000$ Bills receivable $-18000$ Bank $-30400$ TOTAL ASSETS $19160001242400$ EQUITY AND LIABILITIES Ordinary shares of R$1$ each $200000160000$ Capital redemption reserve $150000250000$ Retained earnings $490000370000840000780000$ Non $$ current liabilities $8\%$ Debentures $696000150400$ Loan from Tesco Ltd $-160000$ Current liabilities $380000152000$ Trade and other payables $236000152000$ Bills payable $14000-$ Bank overdraft $130000-$ TOTAL EQUITY AND LIABILITIES $19160001242400$ STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED $31$ DECEMBER $2023$ Tesco Ltd R Diageo Ltd R Turnover $32000002000000$ Profit before tax $16060001111000$ Income tax expense $(642000)(549000)$ Comprehensive income for the year $964000562000$ Other comprehensive income for the year $--$ Total comprehensive income for the year $964000562000$ STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED $31$ DECEMBER $2023$ Retained earnings Tesco Ltd R Diageo Ltd R Balance on $31$ December $2022130000232000$ Total comprehensive income for the year $964000562000$ Transfer to Capital redemption reserve $(114000)(64000)$ Dividend paid $(490000)(360000)$ Balance on $31$ December $2023490000370000$ Additional information: $1.$ The date when Tesco Ltd acquired its interest in Diageo Ltd was $1$ January $2020.$ At that time Capital redemption reserve and retained earnings in Diageo Ltd were $90000$ and $130000$ respectively. $2.$ On $1$ January $2022$ Diageo Ltd sold plant and equipment to Tesco Ltd at a profit of R$100000.$ Both companies depreciate plant and equipment at $20\%$ on straight $$ line basis. $3.$ Since acquisition Tesco Ltd purchases $50\%$ of its inventory from Diageo Ltd at cost plus $25\%.$ Opening inventories in both companies were as follows: $-$ Tesco Ltd R$312000-$ Diageo Ltd R$5300004.$ Intercompany sales during the year is $20\%$ of Diageo Limited$$s total sales. $5.$ The bills payable are in respect of credit purchases from Diageo Ltd$.6.$ The identifiable assets and the liabilities assumed at acquisition are shown at their acquisition$-$date fair values, as determined in terms of IFRS$3.7.$ Ignore tax implication. Required $1\mathrm{.}1$ Prepare an analysis of equity of Diageo Limited at $31$ December $2023.(25$ Marks$)$