QUESTION (18 MARKS) On 1 October 2022, Rover Ltd acquired 100% of the equity of Puma, a leading South African manufacturer of high pressure knife-gate valves that are extensively used in mineral processing.

On the acquisition date, the share capital and retained earnings balance of Puma amounted to R1 000 000 and R12 100 000 respectively.

At acquisition, the fair value of an item of processing equipment, with a cost price of R15 400 000 and carrying amount of R13 860 000 was estimated to be R14 370 000. The estimated useful life of this equipment was also re-assessed at this date and the originally estimated total useful life of 10 years was considered to still be appropriate. This revaluation was not accounted for in the books of RMP.

On 30 September 2022, Rover Ltd had, as part of its property, plant and equipment, properties which the Board of Directors made a decision that it be disposed of as it was part of non-core properties. These properties had a carrying amount of R21 000 000 and a fair value of R22 000 000. It was decided that these properties would form part of the purchase consideration together with an issue of ordinary shares with a fair value of R8 000 000. The total purchase consideration amounted to R30 000 000. The fair value of all other assets and liabilities were deemed to be equal to their carrying values.

Additional information

1. Management elected to measure the non-controlling interest at their proportionate share of the acquirees identifiable net assets at acquisition date.

2. The company tax rate is 27% and the CGT inclusion rate is calculated at 80% thereof.

3. Round off all amounts to the nearest thousand rand.

4. Assume a reporting period ended 30 September.

REQUIRED Prepare and calculate the necessary consolidation pro-forma journal entries to account for the consolidation of Puma in the consolidated financial statements of the Rover Ltd group at 30 September 2023.