Question 2 [20 marks a) Maun limited acquired 3 million shares of P2 each in GABZ limited on the 1of September 2019. The interim statements, on the same day, for GABZ limited were as follows: Pula Property plant and Equipment 8 000 000 Inventories 2 000 000 Receivables 1 450 000 Cash 600 000 Taxation Payables Overdraft Long term loan Share capital (P1 shares) Retained earnings Pula 300 000 1 600 000 1 950 000 2 000 000 4 000 000 2 200 000 12 050 000 Totals 12 050 000 Notes: 1. Information on Property plant and equipment of GABZ limited at 01 Sept 2019 was as follows: Pula Gross replacement cost (GRC) 14 200 000 Net replacement cost (GRC minus depreciation) 8 300 000 Economic value 9 000 000 Net releasable value 4 000 000 2. The replacement cost of inventories in the interim statements of GABZ limited is P2 100 000, at 01 September 2019. All inventory represents raw materials. 3. No provision has been made in the books for costs of rationalization which was due to start on 01 March 2020. The decision to rationalize and bring GABZ limited into the group was taken on 01 September 2019 by Maun Limited. The costs of rationalization amount to P1 500 000 Required: i. Prepare a schedule to compute goodwill of GABZ limited which will form part of the consolidated financial statements as at 31 December 2019. [9 marks] ii. Justify the manner in which you have treated each of the three items in the notes [4 marks) b) Palapye limited owns 80% of shares in Mahalapye limited. Both companies prepare their financials on the 31* of December each year. The following information has been provided: . On 01 January 2019, Mahalapye limited sold plant to Palapye limited, costing P15 000, for P18 750 Palapye limited has revenue reserves, after charging depreciation of 10% on plant, amount to P40 500, on 31 Dec 2019 . Mahalapye limited has revenue reserves, including profit on sale of plant, amounting to P27 000, on 31 Dec 2019. Required: Prepare the consolidated revenue reserves for the Palapye group [7 marks] Question 2 [20 marks a) Maun limited acquired 3 million shares of P2 each in GABZ limited on the 1of September 2019. The interim statements, on the same day, for GABZ limited were as follows: Pula Property plant and Equipment 8 000 000 Inventories 2 000 000 Receivables 1 450 000 Cash 600 000 Taxation Payables Overdraft Long term loan Share capital (P1 shares) Retained earnings Pula 300 000 1 600 000 1 950 000 2 000 000 4 000 000 2 200 000 12 050 000 Totals 12 050 000 Notes: 1. Information on Property plant and equipment of GABZ limited at 01 Sept 2019 was as follows: Pula Gross replacement cost (GRC) 14 200 000 Net replacement cost (GRC minus depreciation) 8 300 000 Economic value 9 000 000 Net releasable value 4 000 000 2. The replacement cost of inventories in the interim statements of GABZ limited is P2 100 000, at 01 September 2019. All inventory represents raw materials. 3. No provision has been made in the books for costs of rationalization which was due to start on 01 March 2020. The decision to rationalize and bring GABZ limited into the group was taken on 01 September 2019 by Maun Limited. The costs of rationalization amount to P1 500 000 Required: i. Prepare a schedule to compute goodwill of GABZ limited which will form part of the consolidated financial statements as at 31 December 2019. [9 marks] ii. Justify the manner in which you have treated each of the three items in the notes [4 marks) b) Palapye limited owns 80% of shares in Mahalapye limited. Both companies prepare their financials on the 31* of December each year. The following information has been provided: . On 01 January 2019, Mahalapye limited sold plant to Palapye limited, costing P15 000, for P18 750 Palapye limited has revenue reserves, after charging depreciation of 10% on plant, amount to P40 500, on 31 Dec 2019 . Mahalapye limited has revenue reserves, including profit on sale of plant, amounting to P27 000, on 31 Dec 2019. Required: Prepare the consolidated revenue reserves for the Palapye group [7 marks]
