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The following information is also available: a) On 01 May 2010 Deer plc paid 400,000 to purchase 160,000 ordinary shares in Bear Ltd. At that date, Bear Ltd had in issue a total of 200,000 Ordinary shares. Bear Ltd has not issued any ordinary shares since this date. Shares in Deer plc and Bear Ltd have a nominal value of 1. b) At the date of acquisition, Bear Ltd had retained earnings of 60,000, a share premium account of 100,000, and the fair value of non-current assets in Bear Ltd was 90,000 more than book value. Non-current assets in Bear Ltd have since been adjusted to reflect this. Bear Ltd has not re-valued any non-current assets since this date. c) During the year ended 30 April 2021, Deer plc sold goods to Bear Ltd for 200,000. These had been marked up by 25%. At 30 April 2021 Bear Ltd still had 40% of these goods in closing inventory. d) During the year Deer plc paid dividends of 400,000. e) Retained earnings at 01 May 2020 were: i. Deer plc - 950,000 ii. Bear Ltd - 200,000 f) A review at 30 April 2021 established impairment of goodwill in the investment in Bear Ltd amounting to 40,000 in the year. g) The non-controlling interest was in the case of this acquisition, calculated by the normal proportionate share of net assets method.

Required: (a) Calculate the goodwill arising on the acquisition of Bear Ltd at 01 May 2010. (4 marks) (b) Prepare a consolidated statement of comprehensive income for the year ended 30 April 2021. Your answer should distinguish between profit for the year attributable to the non-controlling interest and that attributable to the group. (10 marks) (c) Calculate consolidated retained earnings for the year ended 30 April 2021. (5 marks)

(i) The following are the summarised income statements of two companies, Deer plc, and Bear Ltd for the financial year ended 30 April 2021: Income statements for the year ended 30 April 2021 Revenue Cost of sales Gross profit Distribution costs Admin expenses Profit from operations Dividend received from Bear Interest received Profit before tax Taxation Profit for the year Deer plc 000 5,000 2.000 3,000 650 900 1,450 32 62 1,544 366 1,178 Bear Ltd 000 1,300 770 530 172 198 160 24 184 34 150

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