MULTIPLE CHOICE QUESTIONS
QUESTIONS START HERE:
ACCOUNTING Metropolis Ltd and Casper Ltd are both crypto currency developers. The companies are situated in South Africa. On 1 January 2019, Metropolis Ltd acquired 80% of the shares in Casper Ltd. The financial year-end of both companies is 31 December. Below is an extract from the trial balances of the companies on 31 December 2020: Metropolis Ltd R Casper Ltd R 400 000 300 000 Credits Share capital - ordinary shares (200 000 and 150 000 shares respectively)....... Retained earnings - 1 January 2020 Other components of equity Long-term loan ...... Trade and other payables Revenue Other income 3 000 000 163 728 1 500 000 800 000 7 000 000 480 000 13 343 728 2 700 000 95 200 800 000 550 000 5 000 000 350 000 9 795 200 4 300 000 Debits Property, plant and equipment. Investment in Casper Ltd (cost equals fair value). Inventory Trade and other receivables Bank............ Finance charges Cost of sales ......... Other expenses.. Income tax expense.. 680 000 900 000 638 800 4 100 000 2 000 000 1 000 000 1 100 000 369 200 222 400 2 800 000 700 000 1 052 128 13 343 728 2 000 000 470 000 806 400 9 795 200 Additional information 1. On the date of acquisition, the carrying amount of Casper Ltd's assets and liabilities were deemed equal to the fair value thereof. Each share of Casper Ltd carries one vote and voting rights alone determine control. On the acquisition date, Casper Ltd's equity consisted of: R Ordinary share capital.. 300 000 Retained earnings....... 1 700 000 Other components of equity. 95 200 It is group policy to show goodwill at cost less impairment in the consolidated financial statements. Goodwill was not impaired during the current year. The issued share capital of both companies remained unchanged since acquisition. 2. Both companies bank at Hope Bank. Metropolis Ltd and Casper Ltd did not guarantee overdraft bank accounts to one another should one of them default. 3. The intragroup loan was included in trade and other receivables and trade and other payables respectively. The loan amounts to R200 000. Casper Ltd granted the loan to Metropolis Ltd. The loan is payable in the next twelve months and therefore classified as trade and other receivables and payables respectively. 4. Assume that the profit after tax for the current financial year amounts to R2 073 600 for Casper Ltd. 9. Long-term loan amounts to: 1. R1 500 000 2. R 700 000 3. R2 300 000 4. R2 140 000 10. Property, plant and equipment amount to: 1. R7 540 000 2. R8 400 000 3. R4 100 000 4. R4 300 000 11. Goodwill amounts to: 1. R 95 200 2. R742 880 3. R323 840 4. R400 000 12. Non-controlling interests amount to: 1. R 614 720 2 R1 033 760 3. R1 014 720 4. R 414 720 13. Inventory amounts to: 1. R1 000 000 2. R1 680 000 3. R1 544 000 4. R 680 000 14. Investment in Casper Ltd amounts to: 1. R2 000 000 2. R1 600 000 3. No amount will be disclosed as the investment in the consolidated statements. 4. R 400 000 15. Revenue amounts to: 1. R 7 000 000 2. R11 000 000 3. R12 000 000 4. R 2 000 000
