FIA242 Class Test 2
Lucky Ltd acquired 80% of the shares and voting rights over Sand Ltd on 1
January 2019 for R1 000 000, which gives them 80%of the voting rights. On
acquisition date Sand Ltd’s trial balance reflected its equity as consisting of:
Share capital: R192 000; and
Retained earnings: R780 000.
All Sand Ltd’s assets and liabilities were considered to be fairly valued on date of
acquisition. Non-Controlling interest is measured at fair value amounting to
R180 000. The following are the extract separate list of balances of each entity
ending 31 December 2021:
Extract of the List of Balance as at 31
December 2021 Lucky Ltd Sand Ltd
(2 560 000
Share capital ) (192 000)
(2 952 000
Retained earnings: 1 January 2021 ) (1 032 000)
(1 680 000
Loan liability ) (623 280)
(1 024 000
Accounts payable ) (384 000)
(8 960 000
Revenue ) (2 016 000)
Cost of sales 4 340 000 480 000
Depreciation 1 280 000 716 400
Telephone expenses 640 000 175 680
Salaries and wages expense 806 400 86 400
Interest expense 448 000 9 600
Taxation expense 768 000 38 400
Dividends declared 297 600 0
Investment in Sand Ltd 1 000 000 0
Machinery (carrying value) 0 1 152 000
Furniture (carrying value) 4 480 000 1 329 600
Loan asset 1 152 000 0
Inventories 1 024 000 96 000
Lucky Ltd acquired 80% of the shares and voting rights over Sand Ltd on 1
January 2019 for R1 000 000, which gives them 80%of the voting rights. On
acquisition date Sand Ltd’s trial balance reflected its equity as consisting of:
Share capital: R192 000; and
Retained earnings: R780 000.
All Sand Ltd’s assets and liabilities were considered to be fairly valued on date of
acquisition. Non-Controlling interest is measured at fair value amounting to
R180 000. The following are the extract separate list of balances of each entity
ending 31 December 2021:
Extract of the List of Balance as at 31
December 2021 Lucky Ltd Sand Ltd
(2 560 000
Share capital ) (192 000)
(2 952 000
Retained earnings: 1 January 2021 ) (1 032 000)
(1 680 000
Loan liability ) (623 280)
(1 024 000
Accounts payable ) (384 000)
(8 960 000
Revenue ) (2 016 000)
Cost of sales 4 340 000 480 000
Depreciation 1 280 000 716 400
Telephone expenses 640 000 175 680
Salaries and wages expense 806 400 86 400
Interest expense 448 000 9 600
Taxation expense 768 000 38 400
Dividends declared 297 600 0
Investment in Sand Ltd 1 000 000 0
Machinery (carrying value) 0 1 152 000
Furniture (carrying value) 4 480 000 1 329 600
Loan asset 1 152 000 0
Inventories 1 024 000 96 000
