Show written discussion and calculation to the questions (required). paste your answers into the answer box, and

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Show written discussion and calculation to the questions (required). paste your answers into the answer box, and explain the methodology and calculations.

1: MAGIC PLC
Magic Plc is a leading engineering company. On 1 Jan 2020, it acquired 75% of the issued shares of Circus Ltd and gained control. The statements of financial position of the two companies as at 31 December 2020 were as follows:
Magic Plc Circus Ltd £'000 £'000 Non-current assets

Freehold property 950 570

Plant and equipment 780 420

Investment in Circus Ltd 1,460

Current assets Inventory 670 380

Trade receivables 590 475

Cash and cash equivalents 650 520

TOTAL ASSETS 5,100 2,365

Current liabilities

Trade payables 610 425

Non-current liabilities

Debentures 830 240

TOTAL LIABILITIES 1,440 665

NET ASSETS 3,660 1,700

Equity

Ordinary share capital 850 700

Share premium 240 170

Retained earnings 2,570 830 3,660 1,700
The following information is relevant:
1. The balance of Circus Ltd's retained earnings at 1 Jan 2020 was £590,000.
2. On the date of the acquisition, the fair value of Circus Ltd’ freehold property was £270,000 in excess of the book values. Circus Ltd does not account for this amount in its own accounts. Magic Plc depreciates its property using the straight line and at 1 Jan 2020, these assets had a remaining useful life of 15 years.
3. On 1 Jul 2020, Circus Ltd sold inventory to Magic Plc at a price of £210,000. Magic Plc sets its selling prices by marking up the cost by 40%. By 31 December 2020, Magic Plc has sold only half of this inventory to third parties.
4. Included in Magic Plc’s trade payables is a balance due to Circus Ltd of £51,000. Circus Ltd’s trade receivables include a balance of £51,000 owing from Magic Plc.
5. Goodwill arising on acquisition is subject to impairment review. For the year ended 31 Dec 2020, the directors estimate that goodwill has been impaired by £44,000.
Required:
Prepare a consolidated statement of financial position (CSFP) for Magic Plc and its subsidiary as of 31 December 2020.
Show written discussion and calculation to the questions (required). paste your answers into the answer box, and explain the methodology and calculations.