Question 1 On 2 July 2015. H 1.10, purchased the entire issued ordinary share capital of 5 Lid. On this date, S Ltd. had a retained income balance of R4 000 and no general reserve Any purchase difference is to be attributed to the fixed assets of S Ltd. On 30 June 2017, the trial balances of the two companies were as follows Share capital (R1 ordinary shares)- General reserve- Retained income- Accumulated depreciation- Fixed assets at cost Investments in S LM- Net current assets H Ltd. R S Ltd. R 40 000- -10-000- -20 000 5000 -34 000 40 000 900 R00000 R35 000 30-000 34 000 -36 000 R90 000 R35 000 Note Included in the net cumant assets of both companies is a dividend due by S Ltd. to H Ltd. op2000 dividents Required Draw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on 30 June 2017 25000-2000 =23000 R. proft Question 2 H Ltd. bought all the shares in S Ltd. on 30 June 2014 when the retained income of S Ltd. was R8 000 and the general reserve was R12 000. The following list of balances appeared in the books of the two companies on 30 June 2017 H Ltd. R S Ltd. R Debts Land and buildings at cost- Equipment at cost- Investment in S Ltd Stock 60 000- -28 000 44 000- 24 000 -80 000 48 000- -24000 Bank- 000 R292 000 000 R104 000 Credits Share capital (ordinary R1 shares) - -120 000- General reserve 68 000 48 000 20 000 Retained income Creditors -20 000- 62 000 18.000 40 000