1. Analyse the Equity of S Ltd.

 2. When analyzing the equity of the subsidiary at the acquisition date the fair value adjustment for the land would be replaced by the revaluation surplus: draw up the proforma journal entries to record the elimination of the cost of land.

P Limited acquired a 60% interest in S Limited at 1 January 2015, Debits: Land Other non-current assets Current assets Investment in S Limited Credits: Share capital Retained earnings Revaluation surplus Liabilities P Limited R 150 000 205 000 145 000 180 000 680 000 240 000 300 000 140.000 680 000 Limited R S 125 000 120 000 130 000 375 000 120 000 150 000 25 000 80.000 375 000