Cll Goods in tensitand utes! ed peoit(URP) The intagreup currentscmoun's ditty by he goods h-tan st sles of 1-6 rilien on which Pent ade-3 profit of $860,000 (1,800 x 50/150). Ths inventory must be increased by $1-2 milion (is cost, $600,000 is eliminated rom Piet rol, $2-4 milion & deduced fern tade tecekeblesand $1 6 milion (3400 ~ 1,600) is deducted torn te payables (ther eurent bites). (iv) Consolidated tained earnings Pican’s tained eamings Sanders post-acquisition lasses (2,400 x 75% see below) Gain tom reduction of contingent consideration (4,200 ~ 2,700 see below) URP in inventory w i) de! spostsequistion profs (6,000% GrL2 « 40%) he adjustment to the provison for contingent consideration due to events occuring after te acquisition is reported in Income (goodwill s not recalculated) Post-acquistion adjusied losses of Sandor are: Pottasreperted Add back wate of Additonal deprecation on factory Goodwill written of ( (i) ware (reat 2s a pre-acquiston far value ag] ustment) (1) Non-centoling interest Fair valua on acquisition (w () Post acquisition losses (2,400 x 25% (wii) (©) Alteugh the cenceptheh hd hepreparatin ofconezlidaed tnanold sttements ste teatal hererbasottte gap as thoy were asingle économie ently, it must be understee thatthe legal poston is that each member isa soparate legal ently and erence the goUp Mee ches notenstas'a separ legal ent. IN ReUses cn aeTCET of g aup nance FwMEN's in that hey aggregate the assets and lables ofall the members ofthe group. This ean give the impression that all of the group's assets would be avaliale o discharge all ofthe groups labilles. Ths s not the case ‘Applying this tothe stuation in the question, it would mean that ary Hatlity of Ty to Fleant would not be a ability of any ofarmearberothe Fatratgcup. Ihustne wothat Te omenidcted Seren tor INET posMonot Fathatshowsa Skene position with healthy liquidty is not necessary of ay reassurance to Picant. Any decision on granting aeditto Tilby must be based on Tikys oun fer inane reternerts hich Pantchouid obtan, notte group inane statment, Thecther sessbily which would the adkentage ef he shenizh of he geupSs chterentotinanch pasitin i that Pant could a. Tradhatif it wouldactas a guarantor to Wiy's (potential liabily to leant In ths case Tradhat would be lable forthe det to Picant inthe event ofa default by Ty {@)_ Dune -Income statement forthe year ended 31 March 2010, $1000 Revenue (400,000 ~ 8,000 + 12,000 (wt) and (i) 000 Cos of sales (w Gi) 15700) Gross pratt ‘28,300 Distribution costs (26.400) Administrative expenses (34,200 ~ 800 loan note issue costs) (33,700) Investment income 1,200 Prot (ganpen nvestrents at fr value TDUh proter es AFL ~ 2, Finance costs (200 + 1,950 (w(i))) Prot bare tax Tncome tax expense (12,000 ~ 1,400 ~ 1,800 w (v)) Prom ne te yar 4