1. **State the problem:** We need to prepare the consolidated statement of financial position for Local Government as at 31 December 2022 after acquiring 80% controlling interest in Rural Co on 1 January 2021. 2. **Identify key data:** - Purchase price for 80% interest = 100,000 BWP - Non-controlling interest (NCI) fair value = 15,000 BWP - Retained earnings of Rural Co at acquisition = 45,000 BWP - Land fair value adjustment = 20,000 BWP (increase) - Amount owed by Rural Co to Local Government = 6,000 BWP 3. **Calculate total fair value of Rural Co:** $$\text{Total fair value} = \frac{100,000}{0.8} = 125,000$$ 4. **Calculate goodwill:** Goodwill = Total fair value - (Net assets at acquisition + fair value adjustment) Net assets at acquisition = Share capital + Retained earnings (assumed from data, here retained earnings = 45,000) Assuming share capital is the difference: $$\text{Net assets} = \text{Share capital} + 45,000$$ Since share capital is not given, we consider net assets as the sum of purchase price and NCI minus goodwill and fair value adjustment. 5. **Calculate NCI share of net assets:** $$\text{NCI share} = 15,000$$ 6. **Adjust for land fair value:** Add 20,000 BWP to net assets to reflect fair value increase. 7. **Consolidate balances:** - Add Local Government's assets and liabilities - Add Rural Co's assets and liabilities adjusted for fair value and intercompany balances - Eliminate intercompany receivable/payable of 6,000 BWP 8. **Prepare consolidated statement of financial position:** - Assets = Local Government assets + Rural Co assets + 20,000 (land adjustment) - 6,000 (intercompany receivable elimination) - Liabilities = Local Government liabilities + Rural Co liabilities - 6,000 (intercompany payable elimination) - Equity = Local Government equity + NCI + Goodwill **Note:** Without full financial statements of both entities, exact numbers cannot be computed here. **Summary:** The consolidated statement includes: - Total assets adjusted for fair value and intercompany eliminations - Total liabilities adjusted for intercompany eliminations - Equity including controlling interest, NCI, and goodwill This approach ensures accurate reflection of the group's financial position as at 31 December 2022.