ANNEXURE F: FORMATIVE ASSESSMENT 1 QUESTION 1 (65 marks) Peanut Butter Limited holds 60% of the issued ordinary shares of Brownie Limited, a listed company. The trial balances for both companies at 31 December 2021 were as follows: 74 Peanut Butter Brownie Limited Limited Dr/(Cr) Dr/Cr Sales Dividends received Interest income (25 000) (8 100) (180) (1 000) Fair value adjustment - Investment property (500) (300) Fair value adjustment - Investment in subsidiary (400) Rental income-investment property (900) (200) Cost of sales 16 000 4 550 Administration expenses, including rentals 800 300 Interest expenses 2 500 400 Selling and distribution costs 930 750 Tax expense 1 800 1 080 Dividend paid 2 800 300 Share capital (6 000) (1 600) Investment in subsidiary (01/01/2021) (1 100) Retained income (01/01/2021) (15 250) (3 100) Property, plant and equipment (carrying amount) 27 000 3 200 Investment in subsidiary at fair value 4 500 Investment in Peanut Butter 12.5% Debentures 5 000 Investment property at fair value 10 000 4 000 Deferred tax asset 680 Debtors 13 500 900 Inventory 8 000 1 400 Bank 3 000 12.5% Debentures (20 000) (3 000) Deferred tax liability (12 500) Creditors (9 000) (5 260) HFAC333-1-Jan-Jun2022-FA1-LVN-V2-30112021