thanks

SECTION A- [COMPULSORY] QUESTION 1 Paladin, a public listed company, acquired 24 million shares in Saracen on 01 April 2015 This was by way of an immediate payment of $0.75 per share in cash and agreed to pay a further amount of $35,200,000 (deferred consideration) on 01 April 2016. Paladin's cost of capital is 10% per annum and it has only recorded the cash consideration of $0.75 per share At the date of acquisition, the retained earnings of Saracen stood at $ 4 million. The summarized statements of financial position of the two companies as at 31 March 2016 are shown below: Paladin Saracen $000 $000 Non-current assets: Land 9,720 3,000 Property. Plant and Equipment 26,280 34,800 Investments 20,000 56,000 37,800 Current assets Inventory 9.900 4,800 Trade Receivables 13,600 8,600 Cash 1,200 3,800 24,700 17,200 Total assets 80,700 55,000 Equity and liabilities Capital and reserves Ordinary Shares $1 each Share premium Retained Earnings 20,000 8,000 10,600 38,600 30,000 2.000 8,500 40,500 Non-current liabilities 10% Loan note 16,000 4,200 Current liabilities Trade and other payables Taxation 16,500 9,600 26,100 6,900 3,400 10,300 Total Equity and Liabilities 80,700 55,000 Page 2 of 9 Notes: (0) (ii) Paladin's policy is to value the non-controlling interest at fair value at the date of acquisition. For this purpose, the share price of Saracen should be used which was $ 1.50 per share at the date of acquisition. Impairment tests on 31 March 2016 revealed that the consolidated goodwill of Saracen should be written down by $ 3.5 million. Paladin holds a small number of shares in several other companies at a cost of $ 2 million. (ii) (iv) At the date of acquisition, the fair values of Saracen's assets were equal to their carrying amounts with the exception of an item of plant and land. Saracen has not adjusted the carrying amount of its plant and land as a result of the fair value exercise. An item of Saracen's plant had a fair value of $ 5 million above its carrying amount. At that date the plant had a remaining life of four years. Paladin uses straight-line depreciation for plant assuming a nil residual value. (v) Also at the date of acquisition, the fair value of Saracen's Land was $ 4.5 million and at 31 March 2016 this has increased to $ 6 million. The group valuation policy for development land is that it should be carried at fair value and not depreciated. (vi) In January 2015, Saracen sold goods to Paladin for $ 4 million at a markup of 25%. Paladin had $ 2 million of these goods still in inventory at 31 March 2016. (vii) As at 31 March 2016, in the receivables account of Saracen there is an amount due from Paladin amounting to $ 1.3 million. The accountant of the group company confirmed that the intra-group transaction balance (i.e same amount is recorded in both companies' books). Required: Prepare the consolidated statement of financial position for Paladin as at 31 March 2016. [40 Marks] Dag 3 of 9