Question $3$

$25$ Marks

The following are the abridged financial statements of Moon Ltd $("$Moon$")$ and its subsidiary Yodo Ltd $("$Yodo$")$ as at $31$ December $2023$:

$\backslash$table$[[,$Moon,Yodo$],[$Assets$,$N$,$N $$],[$Property Plant and Equipment,$330000,287500],[\backslash$table$[[$Investment in Yodo Ltd at cost price $(360000],[$shares$)]],450000,],[$Investment in First rand Ltd Shares,,$],[\backslash$table$[[12\%$ Debentures $(15000$ debentures of N$$5$ each$],[$in Investec Ltd$)]],75000,],[,,],[$Inventories$,80000,120000],[$Trade receivables,$108500,175500],[$Other current assets,$35000,62000],[$Cash and cash equivalents,$150000,-],[,,],[$Equity and liabilities,$645000,360000],[\backslash$table$[[$Share capital $(800000$ shares Moon and $400000],[$shares Yodo$)]],59000,],[$General reserve,$413000,128250],[$Retained earnings,,$],[$Liabilities$,,],[$Long$-$term loan,$120000,],[,1500,35000],[$Trade payables,,$9250],[$Other current liabilities,,$],[$Bank overdraft,,$]]$

Additional information:

Moon Ltd acquired the ordinary shares of Yodo Ltd on $1$ January $2023$ when the retained earnings was $N$$$95,000.$ Moon Ltd paid for the investment at acquisition date via a bank transfer.

On the date of acquisition of the interest, Moon Ltd was satisfied that the assets and liabilities of Yodo Ltd were fairly valued.

It is the entity's policy to measure any non$-$controlling interests in an acquiree at their proportionate share of the acquiree's identifiable net assets.

$23$

FACULTY OF COMMERCE, MANAGEMENT AND LAW

OLD CURRICULUM MODULES

Required

a$)$ Prepare the at acquisition date pro$-$forma journal entries for the $2023$ group financial statements. Journal narrations are not required.

b$)$ Prepare a Statement of Financial Position as at $31$ December $2023$ for the group in accordance with IFRS. Notes and comparative figures are not required. One $(1)$ mark will be allocated for Presentation Skills.

c$)$ Prepare all the pro$-$forma consolidation journal entries to incorporate Yodo Ltd into the Moon Ltd group for the year ended $31$ December $2023$ assuming that management rather choose to use the fair value method to value non$-$controlling interest. The fair value of the non$-$controlling interest of Yodo at acquisition amounted to $N$$$42000,$ applicable to part $($c$)$ only. Furthermore, assume that the total consideration paid for the shares in Yodo Ltd was N$ $400000.$ Journal narrations are not required.

$(4)$