Question $1(50$ marks$)$

Costa Ltd is a company with a $30$ June year end. The following information relates to Costa Ltd and its subsidiary Jumbo for the year ended $30$ June $20\mathrm{.}22.$

Costa Ltd

Jumbo Ltd

Dr

Cr

Dr

Cr

Property at cost

$600000$

$160000$

Equipment at cost

$300000$

$180000$

Inventories

$100000$

$80000$

Investment in Jumbo Ltd @ fair value $30000$ ordinary shares $($Cost is equal to fair value$)$

$204000$

Bank $$ Obese Bank

$1200$

$12000$

Trade and other receivables

$124400$

$406800$

Income tax expense

$190000$

$170000$

Provisional tax payments

$100000$

$90000$

Loan to parent $($interest free$)$

$140000$

Dividends paid $$ ordinary shares

$40000$

$30000$

Dividends paid $$ preference shares

$12000$

$7500$

$1671600$

$1276300$

Issued share capital $$ Ordinary shares of R$2$ each

$200000$

$100000$

Issued $15\%$ Cumulative preference shares, R$1$ each

$80000$

$50000$

Retained earnings $$ beginning of year

$190000$

$138000$

Accumulated depreciation $-$ Equipment

$128000$

$94000$

Bank overdraft $$ GG Bank

$48000$

Trade and other payables

$175600$

$238300$

Taxation paid

$190000$

$170000$

Loan from subsidiary

$120000$

Profit before tax

$540000$

$486000$

$1671600$

$1276300$

Additional information:

$1.$

Costa Ltd acquired its interest in Jumbo Ltd at $1$ July $20\mathrm{.}18.$ at that date, Jumbo Ltd$$s retained earnings amounted to R$55000.$ Costa Ltd paid R$204000,$ R$75000$ of which was paid for goodwill. The balance was attributable to the revaluation of Jumbo Ltd$$s property. The carrying amount of the assets and liabilities were equal to the fair value thereof. At the date of acquisition there was no arrear preference dividend. Each share carries one vote.

$2.$

Costa Ltd has bought all its inventories from Jumbo Ltd since $1$ July $20\mathrm{.}21.$ jumbo Ltd made a profit of $25\%$ on the cost price of inventories sold to Costa Ltd$.$

$3.$

Jumbo Ltd paid no preference dividends for the period $1$ July $20\mathrm{.}18$ to $30$ June $20\mathrm{.}20.$ on $30$ June $20\mathrm{.}21$ Jumbo Ltd paid a preference dividend of R$22500.$

$4.$

On $29$ June $20\mathrm{.}22$ Jumbo Ltd sent inventories to the value of R$20000$ to Costa Ltd$,$ Costa Ltd only received the inventories on $3$ July $20\mathrm{.}22.$

$5.$

On $2$ January $20\mathrm{.}21,$ Costa Ltd sold a machine to Jumbo Ltd at a profit of R$40000.$ It is group policy to provide for depreciation at $25\%$ per annum according to the reducing balance method.

Ignore all forms of taxes.

REQUIRED: QUESTION $1$

Marks

Prepare the following consolidated financial statements of Costa Ltd and its subsidiary for the year ended $30$ June $20\mathrm{.}22.$

Notes to the financial statements are not required.

$1\mathrm{.}1$

Consolidated statement of financial position as at $30$ June $20\mathrm{.}22$

$35$

$1\mathrm{.}2$

Consolidated statement of comprehensive income for the year ended $30$ June $20\mathrm{.}22$

$15$

TOTAL MARKS

$50$

Answers are to comply with International Financial Reporting Standards $($IFRS$$s$).$ Show all calculations clearly.