Crock Ltd and Cut Ltd are two entities which manufacture crockery and cutlery. Below are the

trial balances of Crock Ltd and Cut Ltd for the financial year ended $31$ December $2022$:Additional information:

Crock Ltd acquired $80\%$ of the ordinary shares $(80000$ shares$)$ of Cut Ltd on $1$ January

$2021$ for R$1579450$ and, as a result, obtained control over Cut Ltd from this date.

On the acquisition date, Cut Ltd$\text{'}$s share capital was $$100000$ and the retained earnings

was $$20500.$ All Cut Ltd$\text{'}$s assets and liabilities were considered to be fairly valued at

acquisition date.

On $1$ July $2022,$ Crock Ltd advanced an interest$-$free, US Dollar $($$$)$ denominated loan of

$$5000$ to Cut Ltd$.$ The loan is payable in US Dollars and is not part of the investment in

Cut Ltd$.$ Ignore the effects of any interest.

On the $30$ September $2022,$ Cut Ltd declared and paid dividends of $$10000.$ Dividend

income is included as part of 'other income' in the financial records of Crock Ltd$.$

Other additional information:

The functional currency of Cut Ltd is the US Dollar $($$$),$ whereas the functional and

presentation currency of Crock Ltd is the South African Rand $($R$).$

Crock Ltd recognised the investment in Cut Ltd at cost under IAS$27\mathrm{.}10($a$),$ in its

separate financial statements.

Crock Ltd elected to measure the non$-$controlling interest at its proportionate share

of the fair value of the Cut Ltd$\text{'}$s identifiable net assets.

Ignore Value Added Tax $($VAT$)$ and Dividends Tax.

The applicable exchanges rates are as follows:REQUIRED:

Prepare all the pro$-$forma journal entries which are necessary to account for Cut Ltd in

the consolidated financial statements of the Crock Ltd Group for the financial year ended

$31$ December $2022.$ Show and reference all workings clearly. Narrations and dates are

not required.

$(40$ marks$)$