6.       On 1 July 20X4 Dabster Company acquired 100 per cent of the share capital of company Saltus.

At the date of acquisition the balances of the equity accounts of Saltus were as follows:

 

  Share capital	  400 000
Retained earnings	300 000
Profit for the year (interim)	40 000

 

 

The condensed statements of financial position of both companies at 31 December 20X4 are as follows (all amounts in  €):

 

Â	  Dabster	Â	  Saltus
Assets	Â	Â	Â
Property, plant and equipment (net)	1 550 000	Â	500 000
Investment in Saltus	800 000	Â	—
Inventories	300 000	Â	200 000
Trade receivables	150 000	Â	200 000
Cash and cash equivalents	50 000	Â	100 000
Total assets	2 850 000	Â	1 000 000
Share capital	1 500 000	Â	400 000
Retained earnings	500 000	Â	300 000
Profit for the year	100 000	Â	100 000
Current liabilities	750 000	Â	200 000
Total equity and liabilities	2 850 000	Â	1 000 000

 

Additional information:

(a)     At acquisition date the fair value of Saltus’ corporate offices (with a re- maining useful life of 20 years) implies a surplus value of €50 000 over the carrying amount.

(b)     During the fourth quarter of 20X4 Dabster sells some of its inventory to Saltus for €125 000, which represents cost plus a mark-up of 25 per cent. Half of these goods are still in the inventory of Saltus at the end of 20X4.

(c)     At 31/12/20X4, goodwill recognized on the acquisition turns out to be im- paired. An impairment loss of 10 per cent should be taken into account.

Required:

(a)     Prepare the consolidated statement of financial position of Dabster Group as at 31 December 20X4.

(b)    Prepare the consolidated statement of financial position of Dabster Group as at 31 December 20X4, assuming that the investment in Saltus represents 80 per cent of the outstanding shares. Apply the partial goodwill method.

(c)     What would be the impact on the consolidated statement of finan- cial position if the full goodwill method is applied for the 20 per cent non-controlling interest?