QUESTION 1 (35 marks) Strawberry Ltd, Blueberry Ltd and Raspberry Ltd are three companies in the food industry. The following are trial balances of Strawberry Ltd and its two subsidiaries for the financial year ended 28 February 2023:

Investment in Blueberry Ltd: 1. On 1 March 2021, Strawberry Ltd acquired an 80% controlling interest in Blueberry Ltd. At acquisition date, Blueberry Ltd had a share capital of R100 000 and retained earnings of R475 000. Blueberry Ltd's identifiable net assets were considered to be fairly valued. The fair value of the non-controlling interest at acquisition date was measured to be R120 000. 2. Blueberry Ltd sells inventory to Strawberry Ltd: Blueberry Ltd started selling inventory to Strawberry Ltd from acquisition date at cost plus 20%. Strawberry Ltd then uses this inventory from Blueberry Ltd as part of its own inventory and on-sells it to third parties. Inventory sales to Strawberry Ltd totalled R620 000 in the books of Blueberry Ltd for the 2023 financial year. Strawberry Ltd had opening inventory of R45 000 and closing inventory of R36 000 on hand in its financial records which were inventory specifically purchased from Blueberry Ltd. 3. Investment in Raspberry Ltd: .On 1 March 2021, Strawberry Ltd also acquired a 55% controlling interest in Raspberry Ltd. At acquisition date, Raspberry Ltd had a share capital of F R50 00O and retained earningS of F R415 000. Raspberry Ltd's i identifable r net assets were considered to be fairly valued. The fair yalue of the non-controllig interest at acquisition date was measured to be R212 000 4. Strawberry Ltd sells inventory to Raspberry Ltd: Strawberry Ltd started selling inventory to Raspberry Ltd from acquisition date at cost plus 50%. Raspberry Ltd then uses this inventory purchased from Strawberry Ltd as part of its own inventory and on-sells it to third parties. Raspberry Ltd reflected opening inventory in its financial records of R78 000 on 1 March 2022. All this inventory was purchased from Strawberry Ltd. All of this opening inventory formed part of sales to third parties in the 2023 financial year. Strawberry Ltd sold inventory to Raspberry Ltd that cost Strawberry Ltd R1 50 000 during the 2023 financial year. A third of this inventory was still on hand at the financial year ended 28 February 2023. Additional information: Strawberry Ltd accounts for investments in subsidiaries at cost in its separate financial statements. All companies of the Strawberry Ltd Group have a 28 February financial year end Strawberry Ltd elected to measure the non-controlling interests of Blueberry Ltd and Raspberry Ltd at fair value on the acquisition date Assume a normal Income Tax rate of 28%. Ignore Value Added Tax (VAT) and Dividend Tax. None of the companies are considered share traders for income tax purposes or investment entities as defined in IFRS 10 Consolidated Financial Statements. REQUIRED: Using the Excel template provided, together with your knowledge on Excel formulas and functions You are required to complete the Excel template i.e. all the cells in yellow to the best of your ability based on the information and instructions provided. You need to make use of links to the trial balances, Excel functions and formulas as far as possible. PART A Prepare the analysis of equity of Blueberry Ltd from acquisition to the end of the financial year ended 28 February 2023. (18 marks) PART B Prepare the at acquisition pro forma journal entry necessary to account for Raspberry Ltd in the Consolidated Financial Statements of the Strawberry Ltd Group. Journal narrations and dates are not required

Strawberry Ltd, Blueberry Ltd and Raspberry Ltd are three companies in the food industry. (35 marks) The following are trial balances of Strawberry Ltd and its two subsidiaries for the financial year ended 28 February 2023 : 1. Investment in Blueberry Ltd: - On 1 March 2021, Strawberry Ltd acquired an 80% controlling interest in Blueberry Ltd. At acquisition date, Blueberry Ltd had a share capital of R100 000 and retained earnings of R475 000 . - Blueberry Ltd's identifiable net assets were considered to be fairly valued. The fair value of the non-controlling interest at acquisition date was measured to be R120 000 . 2. Blueberry Ltd sells inventory to Strawberry Ltd: - Blueberry Ltd started selling inventory to Strawberry Ltd from acquisition date at cost plus 20%. - Strawberry Ltd then uses this inventory from Blueberry Ltd as part of its own inventory and on-sells it to third parties. - Inventory sales to Strawberry Ltd totalled R620 000 in the books of Blueberry Ltd for the 2023 financial year. - Strawberry Ltd had opening inventory of R45 000 and closing inventory of R36 000 on hand in its financial records which were inventory specifically purchased from Blueberry Ltd. 3. Investment in Raspberry Ltd: - On 1 March 2021, Strawberry Ltd also acquired a 55% controlling interest in Raspberry Ltd. At acquisition date, Raspberry Ltd had a share capital of R50 000 and retained earnings of R415 000 . - Raspberry Ltd's identifiable net assets were considered to be fairly valued. The fair value of the non-controlling interest at acquisition date was measured to be R212000. 4. Strawberry Ltd sells inventory to Raspberry Ltd: - Strawberry Ltd started selling inventory to Raspberry Ltd from acquisition date at cost plus 50%. - Raspberry Ltd then uses this inventory purchased from Strawberry Ltd as part of its own inventory and on-sells it to third parties. 110 HFAC331-1-Jul-Dec2023-SA2-SK-V4-17072023 ANNEXURE J: SUMMATIVE ASSESSMENT 2 - Raspberry Ltd reflected opening inventory in its financial records of R78 000 on 1 March 2022. All this inventory was purchased from Strawberry Ltd. All of this opening inventory formed part of sales to third parties in the 2023 financial year. - Strawberry Ltd sold inventory to Raspberry Ltd that cost Strawberry Ltd R150 000 during the 2023 financial year. A third of this inventory was still on hand at the financial year ended 28 February 2023. Additional information: - Strawberry Ltd accounts for investments in subsidiaries at cost in its separate financial statements. - All companies of the Strawberry Ltd Group have a 28 February financial year end. - Strawberry Ltd elected to measure the non-controlling interests of Blueberry Ltd and Raspberry Ltd at fair value on the acquisition date. - Assume a normal Income Tax rate of 28%. - Ignore Value Added Tax (VAT) and Dividend Tax. - None of the companies are considered share traders for income tax purposes or investment entities as defined in IFRS 10 Consolidated Financial Statements. REQUIRED: Using the Excel template provided, together with your knowledge on Excel formulas and functions: You are required to complete the Excel template i.e. all the cells in yellow to the best of your ability based on the information and instructions provided. You need to make use of links to the trial balances, Excel functions and formulas as far as possible. PART A Prepare the analysis of equity of Blueberry Ltd from acquisition to the end of the financial year ended 28February2023.. PART B Prepare the at acquisition pro forma journal entry necessary to account for Raspberry Ltd in the Consolidated Financial Statements of the Strawberry Ltd Group. Journal narrations and dates are not required. (3 marks) PART C Prepare the since acquisition - and current year pro forma journal entries necessary to account for Raspberry Ltd only in the Consolidated Financial Statements of the Strawberry Ltd Group for the financial year ended 28February2023. Be specific regarding which financial statement and which entity the journal relates to. You can write it in brackets after the account description e.g. Income tax (P/L) (Raspberry Ltd). Journal narrations and dates are not required. Please submit the following as part of your completed assignment: The completed Excel document. The PDF version of two sheets ('AOE of Blueberry Ltd' and 'Pro forma journals') showing the amounts. The PDF version of ('AOE of Blueberry Ltd' and 'Pro forma journals') showing the formulas you used. To get the formula view of each of your sheets, go to Formulas > Show Formulas. Your sheet will change so that all the cells where you entered formulas now display the actual formula that you entered. Take a screen print of the screen with all the formulas for assessment. VERY IMPORTANT: - Make sure to include your formulas in your submission, without the formula view of your assessment the assessment cannot be graded, as marks are allocated specifically to the formulas used in your assessment. - Also, to allow for proper grading, when you take a screen print or save your Excel as PDF, ensure that all your information/formulas are shown clearly and can be read properly and that the information/formulas are not cut off and over more than one page. - Please do not deleteladd any columns or rows (in the given worksheet 'Trial balances') \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow[t]{3}{*}{ Abridged Trial balances } & Strawberry Ltd & Blueberry Ltd & Raspberry Ltd & & & \\ \hline & (R) & (R) & (R) & & & \\ \hline & & CR & & CR & DR & CR \\ \hline Ordinary share capital (R1 each) & & 200000 & & 100000 & & 50000 \\ \hline Retained earnings: 1 March 2022 & & 1620700 & & 631800 & & 781760 \\ \hline Trade and other payables & & 354000 & & 232000 & & 136000 \\ \hline Equipment (at carrying value) & 580000 & & 325600 & & 458275 & \\ \hline Trade and other receivables & 554000 & & 467000 & & 310725 & \\ \hline Inventory & 625000 & & 362000 & & 275000 & \\ \hline Investment in Blueberry Ltd (at cost) & 480000 & & & & & \\ \hline Investment in Raspberry Ltd (at cost) & 258500 & & & & & \\ \hline Deferred tax liability & & 67200 & & 50400 & & 40600 \\ \hline Sales & & 3000000 & & 1680000 & & 1062500 \\ \hline Cost of Sales & 2000000 & & 1400000 & & 850000 & \\ \hline Other expenses & 645000 & & 85000 & & 163000 & \\ \hline \multirow[t]{2}{*}{ Income tax expense } & 99400 & & 54600 & & 13860 & \\ \hline & 5241900 & 5241900 & 2694200 & 2694200 & 2070860 & 2070860 \\ \hline \end{tabular}