Question | HAMPLE Hample is a small publicly listed company. On 1 April 2009 it acquired 90% of the equity shares in Sopel, a private limited company. On the same day Hample accepted a 10% loan note from Sopel for $200,000 which was repayable at $40,000 per annum (on 31 March each year) over the next five years. Sopel's retained profits at the date of acquisition were $2,200,000. Statements of financial position as at 31 March 2010 Hample Sopel $000 $000 Non-current assets Property, plant and equipment 2,120 1,990 Intangible - Software 1,800 Investments - equity in Sopel 4,1 10 - 10% loan note Sopel 200 - others 65 210 6,495 4,000 Current assets Inventories 719 560 Trade receivables 524 328 Sopel current account 75 Cash 20 1.338 - 888 Total assets 7,833 4,888 Equity and liabilities: Capital and reserves Equity shares of $1 each 2,000 1,500 Share premium 2,000 500 Retained earnings 2,900 6,900 1,955 3,955 Non-current liabilities 10% Loan note from Hample 160 Government grant 230 230 40 200 Current Liabilities Trade payables 475 472 Hample current account 60 Income taxes payable 228 174 Operating overdraft - 27 703 733 Total equity and liabilities 7,833 4,888The following information is relevant: (i) (ii) (iii) (1") Included in Sopel's property at the date of acquisition was a leasehold property recorded at its depreciated historic cost of $400,000. The leasehold had been sublet for its remaining life of only four years at an annual rental of $80,000 payable in advance on 1 April each year. The directors of Hample plc are of the opinion that the fair value of this leasehold is best reflected by the present value of its future cash flows. An appropriate cost of capital for the group is 10% per annum. The present value of a $1 annuity received at the end of each year where interest rates are 10% can be taken as: 3 year annuity $260 4 year annuity $320 The software of Sopel represents the depreciated cost of the development of an integrated business accounting package. It was completed at a capitalised cost of $2,400,000 and went on sale on 1 April 2008. Sopel's directors are depreciating the software on a straight-line basis over an eight-year life (i.e. $300,000 per annum). However, the directors of Hample are of the opinion that a five-year life would be more appropriate as sales of business software rarely exceed this period. The inventory of Harnple on 31 March 2010 contains goods at a transfer price of $25,000 that were supplied by Sopel who had marked them up with a profit of 25% on cost. Unrealised prots are adjusted for against the prot of the company that made them. On 31 March 2010 Sopel remitted to Hample a cash payment of $55,000. This was not received by Hample until early April. It was made up of an annual repayment of the 10% loan note of $40,000 (the interest had already been paid) and $15,000 off the current account balance. Non-controlling interest is valued at fair value on acquisition, the fair value of a share in Sopel on 1 April 2009 was $3.00. Goodwill has fallen in value by $120,000 since the acquisition occurred. Required: Prepare the consolidated statement of nancial position of Hample for the year ended 31 March 2010. (20 marks)