Question 1 A Ltd. was incorporated with a capital of R200 000, composed of 200 000 ordinary shares of Ri ench. A Ltd. purchased the total issued capital of B Ltd. from the existing shareholders on 1 January 1985. The capital of B Ltd. was 100 000 shares of R1 ench. The balance sheet of B Ltd. at 1 January 1985 was as follows: Liabies LTD. R. ASSIM Share capital authorised and issued 100 000 shares of R1 each Unappropriated profits Creditors Fored property Other oss R 200 000 2.400 100 000 30 000 94.000 224,000 The purchase price was R200 000. This was satisfied by the issue of 160 000 sharer of A Led prioed at a premium of 25 cents pershare A Ltd. valued the fixed property of B Ltd. at R270 000 in riving at this purchase price, but the book value was not adjusted in B. booloo BLtd. continued to trade as a subsidiary of A Lo The profits of BLtd. for year ended 30 June 1985 were R37 000 A dividend of Raoooo was declared out of these profits and paid in July 1985 B Ltd cold the fixed property on 1 July 1985 for R250 000 The profits of B Ltd. for the year ended 30 June 1986 mounted to R20 000 This amount plus the profit on the sale of the property declared as a dividend on 30 June 1986 and paid in July 1986) You are required o Tvneho The profits of B Ltd. for the year ended 30 June 1986 amounted to R20 000. This amount plus the profit on the sale of the property was declared as a dividend on 30 June 1986 and paid in July 1986. You are required: (a) to show by journal entries in the books of A Ltd.: i. the purchase of the shares in B Ltd.; . the receipts of dividends from A Ltd.; and any other adjustment which you consider advisable (assume that profits have been earned evenly throughout the period); and (b) to show the balance sheet of A Ltd. at 30 June 1986. (20) Question 1 A Ltd. was incorporated with a capital of R200 000, composed of 200 000 ordinary shares of Ri ench. A Ltd. purchased the total issued capital of B Ltd. from the existing shareholders on 1 January 1985. The capital of B Ltd. was 100 000 shares of R1 ench. The balance sheet of B Ltd. at 1 January 1985 was as follows: Liabies LTD. R. ASSIM Share capital authorised and issued 100 000 shares of R1 each Unappropriated profits Creditors Fored property Other oss R 200 000 2.400 100 000 30 000 94.000 224,000 The purchase price was R200 000. This was satisfied by the issue of 160 000 sharer of A Led prioed at a premium of 25 cents pershare A Ltd. valued the fixed property of B Ltd. at R270 000 in riving at this purchase price, but the book value was not adjusted in B. booloo BLtd. continued to trade as a subsidiary of A Lo The profits of BLtd. for year ended 30 June 1985 were R37 000 A dividend of Raoooo was declared out of these profits and paid in July 1985 B Ltd cold the fixed property on 1 July 1985 for R250 000 The profits of B Ltd. for the year ended 30 June 1986 mounted to R20 000 This amount plus the profit on the sale of the property declared as a dividend on 30 June 1986 and paid in July 1986) You are required o Tvneho The profits of B Ltd. for the year ended 30 June 1986 amounted to R20 000. This amount plus the profit on the sale of the property was declared as a dividend on 30 June 1986 and paid in July 1986. You are required: (a) to show by journal entries in the books of A Ltd.: i. the purchase of the shares in B Ltd.; . the receipts of dividends from A Ltd.; and any other adjustment which you consider advisable (assume that profits have been earned evenly throughout the period); and (b) to show the balance sheet of A Ltd. at 30 June 1986. (20)