Answer ALL questions Section A (25 marks) Question 1 a) The HY group acquired 35% of the equity share capital of SX on 1 July 2019 paying R70,000. This shareholding enabled HY group to exercise significant influence over SX. At 1 July 2019 the equity of SX comprised: R R1 equity shares 100,000 Retained earnings 50,000 SX made a profit for the year ended 30 June 2020 (prior to dividend distribution) of R130,000 and paid a dividend of R80,000 to its equity shareholders. Calculate the value of HYs investment in SX for inclusion in its consolidated statement of financial position at 30 June 2020. (Total for sub-question (a) = 5 marks)

b) CD had 5,000,000 R1 ordinary shares in issue. Subsequently, CD made a rights issue of 1 new ordinary share at R3.50 per share for every 5 ordinary shares currently held. At the same date CDs ordinary shares were trading at R4.75. Required: (i) Explain the difference between a bonus issue and a rights issue of shares. (ii) Prepare the journal entries required to record CDs rights issue in its financial records, assuming that all rights were taken up. (Total for sub-question (d) = 5 marks)