FAC2602
EXAM
PACK
2026
, FAC2602 – October/November 2025
Model Answers
QUESTION 1 (33 marks)
REQUIRED 1a: NCI in Intragroup Dividend (60% control) — 2½ marks
Calculation:
• Dividend declared by MoveMzansi Ltd = R730 000
• NCI = 40%
• NCI share = R730 000 × 40% = R292 000
Pro-forma Journal:
Account Dr (R) Cr (R)
Dividends payable (MoveMzansi Ltd) 730 000
Dividends receivable (Jump Ltd) 438 000
Non-controlling interest (SFP) 292 000
Note: The dividend was not recorded by either company, so it must first be recognised, then
eliminated.
Step 1 – Recognise the unrecorded dividend in both companies:
Account Dr (R) Cr (R)
Dividends receivable (Jump Ltd) 438 000
Non-controlling interest receivable 292 000
Dividends payable (MoveMzansi Ltd) 730 000
Step 2 – Eliminate intragroup dividend (parent's share):
Account Dr (R) Cr (R)
Dividends payable (MoveMzansi Ltd) 438 000
, Account Dr (R) Cr (R)
Dividends receivable (Jump Ltd) 438 000
Step 3 – Recognise NCI share of dividend:
Account Dr (R) Cr (R)
Non-controlling interest (SFP) 292 000
Dividends payable (MoveMzansi Ltd) 292 000
REQUIRED 1b: NCI in Current Year Profit (60% control) — 4 marks
Calculation:
• Profit after tax of MoveMzansi Ltd = R2 270 000
• NCI % = 40%
• NCI share of profit = R2 270 000 × 40% = R908 000
Pro-forma Journal:
Account Dr (R) Cr (R)
Non-controlling interest (P/L) 908 000
Non-controlling interest (SFP) 908 000
REQUIRED 1c: Associate – Share of Profit (25% interest) — 2 marks
Calculation:
• Profit after tax of MoveMzansi Ltd = R2 270 000
• Jump Ltd's share = 25%
• Share of profit = R2 270 000 × 25% = R567 500
Pro-forma Journal (Equity Method):
Account Dr (R) Cr (R)
Investment in associate (SFP) 567 500
Share of profit of associate (P/L) 567 500
, REQUIRED 2: Memorandum — 24½ marks
MEMORANDUM
To: Shareholders of the Jump Ltd Group From: Professional Accountant Date: 31 August 2024
Re: Accounting Treatment – Sale of Hypoxic Trainer Equipment and Related Depreciation
BACKGROUND
On 1 May 2022, Jump Ltd sold hypoxic trainer equipment to MoveMzansi Ltd for R640 000.
This is an intragroup transaction. The asset has not left the group economically, so any profit
recognised on this sale must be eliminated on consolidation.
PART A: SUBSIDIARY (60% CONTROL)
Calculations:
Profit on sale of equipment:
Item R
Selling price 640 000
Carrying amount at date of sale (1 May 2022) (550 000)
Profit on sale 90 000
Depreciation adjustment:
The group policy is 20% per annum, straight-line.
Depreciation as recorded by MoveMzansi Ltd (on purchase price of R640 000):
• Annual depreciation = R640 000 × 20% = R128 000
Depreciation that should have been recorded (based on original carrying amount of R550 000 to
the group):
• Annual depreciation = R550 000 × 20% = R110 000
Excess depreciation charged per year = R128 000 – R110 000 = R18 000
Period from 1 May 2022 to 31 August 2024:
• Year 1: 1 May 2022 – 31 Aug 2022 = 4 months → excess dep = R18 000 × 4/12 = R6
000
EXAM
PACK
2026
, FAC2602 – October/November 2025
Model Answers
QUESTION 1 (33 marks)
REQUIRED 1a: NCI in Intragroup Dividend (60% control) — 2½ marks
Calculation:
• Dividend declared by MoveMzansi Ltd = R730 000
• NCI = 40%
• NCI share = R730 000 × 40% = R292 000
Pro-forma Journal:
Account Dr (R) Cr (R)
Dividends payable (MoveMzansi Ltd) 730 000
Dividends receivable (Jump Ltd) 438 000
Non-controlling interest (SFP) 292 000
Note: The dividend was not recorded by either company, so it must first be recognised, then
eliminated.
Step 1 – Recognise the unrecorded dividend in both companies:
Account Dr (R) Cr (R)
Dividends receivable (Jump Ltd) 438 000
Non-controlling interest receivable 292 000
Dividends payable (MoveMzansi Ltd) 730 000
Step 2 – Eliminate intragroup dividend (parent's share):
Account Dr (R) Cr (R)
Dividends payable (MoveMzansi Ltd) 438 000
, Account Dr (R) Cr (R)
Dividends receivable (Jump Ltd) 438 000
Step 3 – Recognise NCI share of dividend:
Account Dr (R) Cr (R)
Non-controlling interest (SFP) 292 000
Dividends payable (MoveMzansi Ltd) 292 000
REQUIRED 1b: NCI in Current Year Profit (60% control) — 4 marks
Calculation:
• Profit after tax of MoveMzansi Ltd = R2 270 000
• NCI % = 40%
• NCI share of profit = R2 270 000 × 40% = R908 000
Pro-forma Journal:
Account Dr (R) Cr (R)
Non-controlling interest (P/L) 908 000
Non-controlling interest (SFP) 908 000
REQUIRED 1c: Associate – Share of Profit (25% interest) — 2 marks
Calculation:
• Profit after tax of MoveMzansi Ltd = R2 270 000
• Jump Ltd's share = 25%
• Share of profit = R2 270 000 × 25% = R567 500
Pro-forma Journal (Equity Method):
Account Dr (R) Cr (R)
Investment in associate (SFP) 567 500
Share of profit of associate (P/L) 567 500
, REQUIRED 2: Memorandum — 24½ marks
MEMORANDUM
To: Shareholders of the Jump Ltd Group From: Professional Accountant Date: 31 August 2024
Re: Accounting Treatment – Sale of Hypoxic Trainer Equipment and Related Depreciation
BACKGROUND
On 1 May 2022, Jump Ltd sold hypoxic trainer equipment to MoveMzansi Ltd for R640 000.
This is an intragroup transaction. The asset has not left the group economically, so any profit
recognised on this sale must be eliminated on consolidation.
PART A: SUBSIDIARY (60% CONTROL)
Calculations:
Profit on sale of equipment:
Item R
Selling price 640 000
Carrying amount at date of sale (1 May 2022) (550 000)
Profit on sale 90 000
Depreciation adjustment:
The group policy is 20% per annum, straight-line.
Depreciation as recorded by MoveMzansi Ltd (on purchase price of R640 000):
• Annual depreciation = R640 000 × 20% = R128 000
Depreciation that should have been recorded (based on original carrying amount of R550 000 to
the group):
• Annual depreciation = R550 000 × 20% = R110 000
Excess depreciation charged per year = R128 000 – R110 000 = R18 000
Period from 1 May 2022 to 31 August 2024:
• Year 1: 1 May 2022 – 31 Aug 2022 = 4 months → excess dep = R18 000 × 4/12 = R6
000
