QUESTION 2 (20 marks) Cool Runnings (Pty) Ltd ("CR") is a manufacturer of refrigeration systems that are used in industrial air-conditioning units. CR acquired 30% of the ordinary shares of ICE (Pty) Ltd ("ICE"), an importer of refrigeration systems, on 1 November 2016. The cost of the investment amounted to R12 757500 The main reason for making the investment is because ICE is one of CR's largest suppliers and the CEO of CR, Mr Frozen, has plans to integrate the whole supply chain over the next five years. The statement of financial position of ICE as at 31 October 2016 was supplied to you: Additional information 1. Income earned by ICE amounted to R25 717500 for 2017 and R28 597500 for 2018. 2. ICE depreciates plant and equipment on the straight-line basis and at the time of the investment, plant and equipment had a useful life of six years remaining. ICE does not depreciate land and buildings. 3. During 2017 ICE sold products to CR for R7 650000 . ICE paid R5 355000 for these units. At 31 October 2017CR had R2 565000 worth of these products in closing inventory which was sold to third parties during 2018. 4. During 2017 ICE paid dividends of R15 975 000. No dividends were paid during 2018. QUESTION 2 (20 marks) Cool Runnings (Pty) Ltd ("CR") is a manufacturer of refrigeration systems that are used in industrial air-conditioning units. CR acquired 30% of the ordinary shares of ICE (Pty) Ltd ("ICE"), an importer of refrigeration systems, on 1 November 2016. The cost of the investment amounted to R12 757500 The main reason for making the investment is because ICE is one of CR's largest suppliers and the CEO of CR, Mr Frozen, has plans to integrate the whole supply chain over the next five years. The statement of financial position of ICE as at 31 October 2016 was supplied to you: Additional information 1. Income earned by ICE amounted to R25 717500 for 2017 and R28 597500 for 2018. 2. ICE depreciates plant and equipment on the straight-line basis and at the time of the investment, plant and equipment had a useful life of six years remaining. ICE does not depreciate land and buildings. 3. During 2017 ICE sold products to CR for R7 650000 . ICE paid R5 355000 for these units. At 31 October 2017CR had R2 565000 worth of these products in closing inventory which was sold to third parties during 2018. 4. During 2017 ICE paid dividends of R15 975 000. No dividends were paid during 2018