1 (40 marks) The following trial balances were obtained from the financial records of Light Ltd (Light) and Bulb Ltd (Bulb) for the financial year ended 28 February 2023: Abridged Trial balances Light Ltd (R) Bulb Ltd (R) DR CR DR CR Ordinary share capital (R1 each) 500 000 100 000 Preference share capital - 150 000 Retained earnings (1 March 2022) 880 750 935 000 Revaluation reserve: Land (1 March 2022) (Note 2) - 77 600 Preference dividends paid (Note 3) - ? Trade and other payables 251 000 65 000 Land 750 000 350 000 Equipment (at carrying value) 1 245 000 1 559 200 Trade and other receivables 523 000 270 000 Inventory 325 000 125 000 Investment in Bulb: Ordinary shares at cost (Note 1) 500 000 - Investment in Bulb: Preference shares at cost (Note 3) 64 500 - Deferred tax (liability) 120 750 61 600 Profit after tax 1 655 000 945 000 Revaluation gain on land (OCI) (Note 2) - ? Tax expense on revaluation gain on land (OCI) (Note 2) - 11 200 3 407 500 3 407 500 ? ? 3 HFAC331-1-July-Dec2023-SA1-SK-V5-20102023 Notes: 1. Acquisition of Bulbs ordinary shares On 1 March 2021, Light purchased 80 000 shares (80% shareholding) in Bulb for R500 000 and thereby obtained control over Bulb on this date. The net assets and liabilities of Bulb were considered to be fairly valued on the acquisition date except for land which had a carrying value of R200 000 and a fair value of R275 000 on 1 March 2021. Bulbs equity comprised of the following balances on the acquisition date, 1 March 2021: Share capital (100 000 shares) R100 000 Retained earnings R460 000 Total equity R560 000 2. Revaluation of land Subsequently, Bulb revalued its land in its own financial records as follows: Revaluation date: Revalued amount: 28 February 2022 R300 000 28 February 2023 R350 000 3. Preference shares On 1 March 2022, Bulb issued 6 000 non-redeemable, cumulative preference shares at R25 per share with a dividend rate of 20%. The preference shareholders have the right to receive their preference dividends before the payment of any ordinary dividends. Preference shareholders also have the right to receive a proportionate share of Bulbs net assets should the entity become liquidated. Light acquired 40% of these preference shares on 1 March 2022. There were no further issues of preference shares by Bulb during the 2023 financial year. 4 HFAC331-1-July-Dec2023-SA1-SK-V5-20102023 Other information: Light elected to measure the non-controlling interest at its proportionate share of Bulbs identifiable net assets at the acquisition date (partial goodwill method). Light is not a share dealer for income tax purposes. All companies in the Light Ltd Group have a 28 February financial year end. Assume an Income Tax rate of 28% in all financial years and that 80% of capital gains are included in taxable income in all financial years, at the time gains are realised. Ignore the effects of Dividend Tax and Value Added Tax (VAT). REQUIRED: Prepare all the pro forma general journal entries to account for Bulb Ltd in the Consolidated Financial Statements of the Light Ltd Group for the financial year ended 28 February 2023. Dates and narrations are not required. Show and reference all your workings and calculations clearly. Round all amounts to the nearest Rand. The symbol ? in the abridged trial balances indicates amounts that must be calculated in order to prepare the pro forma journals (i.e. the amounts were not given)