Panda Bhd is a company that listed on Bursa Malaysia. It has finally succeeded in acquiring a controlling interest in its principle supplier, Stone Bhd. On 1 April 2020, Panda purchased 44,680 shares in Stone Bhd. The consideration consisted of two elements: a share exchange of three shares in Panda for every five acquired shares in Stone and the issue of a RM100 6% loan note for every 500 shares acquired in Stone. None of the purchase consideration, both share issue and issue of the loan notes has yet been recorded by Panda. At the date of acquisition, shares in Panda had a market value of RM5 each and the shares of Stone had a stock market price of RM3.50 each. The retained earnings of Stone on the date of acquisition was RM18,000. Panda group uses the fair value method to value the non-controlling interest. At the date of acquisition, the share price of Stone can be deemed to be representative of the fair value of the shares held by the non controlling interest. On 1 April 2020, the fair value of an item of plant in Stone was RM2,500 more than carrying amount and no changes have been made in the financial statements of Stone regarding to the fair value adjustment. The plant had a remaining useful life of 25 months at 1 April 2020. All profits and losses accrued evenly throughout the year. On 1 July 2020, Stone sold a machine worth RM8,000 to Panda for RM12,800. Panda is adopting straight line depreciation at the rate of 15% per annum. Panda had traded with Stone for many years before the acquisition. Sales from Stone to Panda throughout the year ended 31 December 2020 were consistently RM12,000 per month. Stone sells trading inventories to Panda at cost plus 40% and Panda had RM4,000 of these goods in inventory as at 31 December 2020. Trade receivables of Panda include RM1,500 due from Stone. Panda has factored RM1,000 of these receivables to a third party. It is approaching the year end, the CFO wants to understand how the above acquisition and transactions will be reported, both in the financial statements and elsewhere. She is concerning the issues regarding the acquisition and the conceptual reasons underlying the financial reporting. Given below are the statements of financial position of Panda Bhd and Stone Bhd as at 31 December 2020.