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On 1 March 2020, Juicy acquired 40% (i.e., acquired 20000 shares) of the ordinary share capital of Fruity for R70 000 cash and thereby obtained

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On 1 March 2020, Juicy acquired 40% (i.e., acquired 20000 shares) of the ordinary share capital of Fruity for R70 000 cash and thereby obtained significant influence over Fruity on that date. On 1 March 2020, the thare capital of Fruity was R50 000 and the retained earnings was R117 000. All of Fruity's assets and liabilities were considered to be fairly valued on this date. 103 HFACI33-1-Jul-Dec2023-FA2-5K-V4-17072023 ANNEXUQE : FORMATIVE ASSESSMENT 2 Juicy also measures investments in subsidiaries and associates at cost in its separate financial statements. On 1 December 2022, Fruity had a rights issue of 1 share for every 2 shares previously held. The rights issue price was R8 per share. The right issue was taken up in full by Juicy and thereby, from that date, Juicy exercised control over Fruity. All Fruity's assets and liabilities were considered to be fairly valued on 1 December 2022. Prior to this right issue, there were no other changes in the ordinary share capital of Fruity. Juicy elected to measure the non-controlling interest at its proportionate share of Fruity's identifiable net assets at the acquisition date. The fair value of Juicys previously held interest in Fruity was R190 000 on 1 December 2022. During January 2023, Fruity sold inventory to Juicy at markup of 50% on cost. The total sales value of this inventory was R45 000 in Fruitys records. At the end of the current financial year, Juicy's financial records indicated that half of this inventory was still on hand and that the other half was on-sold to third parties. Included in the 'other income' of Juicy is the dividend income received from Fruity. The ordinary dividends were declared and paid on 28 February 2023. Other information: - Fruity's sales, expenses, other income and finance costs were eamed evenly throughout the financial year. All income and expenses were fully received and paid. - All companies in the Juicy Lid Group have a 28 February financial year-end. - Assume that the SARS also allows the same annual allowance regarding property. plant and equipment as the entities' depreciation. - Assume an Income Tax rate of 28% for all periods and that 80% of capital gains are included in taxable income in all periods at the time gains are realised. - Ignore the effects of Dividends Tax and Value Added Tax (VAT). 104 HFAC333-1-Jul-Dec2023-FA2-SK-V4-17072023 ANNEXURE I: FORMATIVE ASSESSMENT 2 REQUIRED: 1.1 Prepare the Consolidated Statement of Profit and Loss and Other Comprehensive Income for the Juicy Group for the financial year ended 28 February 2023. Show and reference all your workings and calculations dearly. Notes to the financial statements are not required. (55 marks) 1.2 Prepare only the NCl (non-controlling interest) column of the Consolidated Statement of Changes in Equity. Reference clearly any workings that you may use from question 1.1. (10 marks)

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