? Additional information:

Costa Ltd acquired its interest in Jumbo Ltd at $1$ ?July $20\mathrm{.}18.$ ?at that date, Jumbo Ltd$\text{'}$s retained

earnings amounted to R$55000.$ ?Costa Ltd paid R$204000,$ ?R$75000$ ?of which was paid for

goodwill. The balance was attributable to the revaluation of Jumbo Ltd$\text{'}$s property. The carrying

amount of the assets and liabilities were equal to the fair value thereof. At the date of acquisition

there was no arrear preference dividend. Each share carries one vote.

Costa Ltd has bought all its inventories from Jumbo Ltd since $1$ ?July $20\mathrm{.}21.$ ?jumbo Ltd made a

profit of $25\%$ ?on the cost price of inventories sold to Costa Ltd$.$

Jumbo Ltd paid no preference dividends for the period $1$ ?July $20\mathrm{.}18$ ?to $30$ ?June $20\mathrm{.}20.$ ?on $30$

June $20\mathrm{.}21$ ?Jumbo Ltd paid a preference dividend of R$22500.$

On $29$ ?June $20\mathrm{.}22$ ?Jumbo Ltd sent inventories to the value of R$20000$ ?to Costa Ltd$,$ ?Costa Ltd

only received the inventories on $3$ ?July $20\mathrm{.}22.$

On $2$ ?January $20\mathrm{.}21,$ ?Costa Ltd sold a machine to Jumbo Ltd at a profit of R$40000.$ ?It is group

policy to provide for depreciation at $25\%$ ?per annum according to the reducing balance method.

Ignore all forms of taxes.Question $1(50$ ?marks$)$

Costa Ltd is a company with a $30$ ?June year end. The following information relates to Costa Ltd and its

subsidiary Jumbo for the year ended $30$ ?June $20\mathrm{.}22.$