1.Choose the correct option with respect to associates and joint ventures.
An investor holds 25% in an associate. An intragroup profit of R8 900 in closing inventory was incurred and the associate is the
seller. The journal entry to eliminate the unrealised profit is:
1.
Dr share of profit of associate and Cr Inventories with R2 225 (R 8 900 * 25%) in the group statements.
2.
Cr share of profit of associate and Dr Inventories with R2 225 (R 8 900 * 25%) in the group statements.
3.
Cr share of profit of associate and Dr Inventories with R8 900 in the group statements.
4.
Dr share of profit of associate and Cr Inventories with R8 900 in the group statements
2.Choose the correct option with respect to associates and joint ventures.
When an investor increases the investment in shares from 10% to 30% in an investee during the current year, (shareholding
alone determines significant influence):
1.
The investment is an associate, the equity method can be applied to account for 100% of assets and liabilities of the investee in
the consolidated statements.
, 2.
The investee is an associate, and we can consolidate the financial statements of both companies.
3.
The investee is an associate of the investor, and the equity method can be applied to record the investment in the consolidated
statements.
4.
The investee is an associate of the investor, and the investor has control over the financial decision of the investee.
3. Use the scenario loaded under additional resources to answer the following question.
With reference to Part A, answer the following question relating to the consolidated financial statements of the GOWNS Ltd
Group for the year ended 31 July 2023. Select only one option per question.
The balance of property, plant, and equipment in the consolidated statement of financial position of the GOWNS Ltd Group as
at 31 July 2023 amounts to:
1.
R3 894 000
2.
R4 362 425
3.
An investor holds 25% in an associate. An intragroup profit of R8 900 in closing inventory was incurred and the associate is the
seller. The journal entry to eliminate the unrealised profit is:
1.
Dr share of profit of associate and Cr Inventories with R2 225 (R 8 900 * 25%) in the group statements.
2.
Cr share of profit of associate and Dr Inventories with R2 225 (R 8 900 * 25%) in the group statements.
3.
Cr share of profit of associate and Dr Inventories with R8 900 in the group statements.
4.
Dr share of profit of associate and Cr Inventories with R8 900 in the group statements
2.Choose the correct option with respect to associates and joint ventures.
When an investor increases the investment in shares from 10% to 30% in an investee during the current year, (shareholding
alone determines significant influence):
1.
The investment is an associate, the equity method can be applied to account for 100% of assets and liabilities of the investee in
the consolidated statements.
, 2.
The investee is an associate, and we can consolidate the financial statements of both companies.
3.
The investee is an associate of the investor, and the equity method can be applied to record the investment in the consolidated
statements.
4.
The investee is an associate of the investor, and the investor has control over the financial decision of the investee.
3. Use the scenario loaded under additional resources to answer the following question.
With reference to Part A, answer the following question relating to the consolidated financial statements of the GOWNS Ltd
Group for the year ended 31 July 2023. Select only one option per question.
The balance of property, plant, and equipment in the consolidated statement of financial position of the GOWNS Ltd Group as
at 31 July 2023 amounts to:
1.
R3 894 000
2.
R4 362 425
3.
