QUESTION5 On 1 February 2016, Vodacom Limited ("Vodacom") acquired the entire 100% issued Class A share capital of Sasol Limited ("Sasol") for R120 000 ( at which date the retained earnings of Sasol was R20 000). At the date of acquisition, all of the identifiable assets and liabilities of Sasol were fairly valued at R120 000. Financial statements are set out below on the statement of financial position as at 31 January 2017: Assets Non - current Assets 190 000 Land at cost - Plant at carrying amount 70 000 Investment in Sasol Limited, at cost 120 000 Current assets 227 000 108 000 Inventory 84 000 52 000 Account receivable 58 000 48 000 Bank 85 000 8 000 Total Assets 417 000 160 000 Equity and liabilities 200 000 100 000 Class A share capital Retained earnings 137 000 22 000 Shareholders' equity 337 000 122 000 Current liabilities 80 000 38 000 Account payable 18 000 Loan from Sasol Limited 20 000 - Total Equity and Liabilities 160 000 RETAINED EARNINGS RECONCILIATION: Opening balance 120 000 20 000 Total comprehensive income 33 000 12 000 Dividends (16 000) (10 000) Closing balance 137 000 Vodacom Ltd R 80 000 417 000 Vodacom Ltd R Sasol Ltd R 52 000 36 000 16 000 - Sasol Ltd R 22 000 Statement of profit or loss and other comprehensive income for the year ended 31 January 2017: Revenue 200 000 Cost of sales (100 000) Gross profit 100 000 50 000 Net operating costs (52 000) (28 000) Profit from ordinary activities 48 000 22 000 Interest paid - (2 000) Vodacom Ltd R Sasol Ltd R 100 000 (50 000)
Profit before tax 48 000 20 000 Taxation (15 000) (8 000) Profit after tax 33 000 12 000 Additional information: Vodacom: . The interest in the subsidiary consists of R140 000, being shares of R120 000 and loan of R20 000 from Sasol. · Revenue includes the following income received from subsidiary: R Dividends 10 000 Interest 2 000 · Operating costs includes depreciation expense of R10 000 · The plant had an original cost of R120 000. Sasol: . There were no sales of fixed assets during the year ended 2017. . Net operating costs include depreciation of R8 000 · Interest paid of R2 000 was received from Vodacom. REQUIRED: (a) Prepare the pro-forma consolidating journal entries of the Vodacom limited group for the year ended 31 January 2017. 11.0 Narrations are required. (b) Prepare the consolidated statement of profit or loss and other comprehensive income of the Vodacom limited group for the year ended 31 January 2017. (c) Prepare the consolidated statement of changes in equity of the Vodacom limited group as at 31 January 2017. 6.0 (d) Prepare the consolidated statement of financial position of the group at 31 January 2017 Note: The Property, plant and equipment with a reconciliation is required. 21.5 (Including Note disclosure for the PPE reconciliation) Show calculations or