QUESTION 3 (39 marks) On 1 April 2020, Orico Limited acquired 120 000 shares in Pro Limited for a consideration of R350 000. On the date of acquisition Pro Limited had the following balances: Rand 150 000 Share capital (150 000 shares) Retained earnings 250 000 Orico Limited considered Pro Limited's net assets to be fairly valued at the acquisition date and chose to measure any non-controlling interest at the attributable net asset value at acquisition Since acquiring the shares, Orico Limited has been actively involved in Pro Limited's daily activities. They have the right to appoint or remove members on the board of Pro Limited. The companies had the following profit figures for the year ended 31 March 2021: Orico Limited R255 500 Pro Limited R125 800 87 HFAC334-1-JUL-DEC2021-FA2-CP-V3-18052021 ANNEXURE : FORMATIVE ASSESSMENT 2 REQUIRED: 3.1) Discuss whether Pro Limited will qualify as a subsidiary of Orico Limited in terms of the requirements of IFRS 10, (15 marks) 3.2) Prepare the pro-forma journal entry required to account for Pro Limited's acquisition in the consolidated financial statements of Orico Limited. (8 marks) 3.3) Calculate the non-controlling interest amount to be recognised in the group financial statements of Orico Limited for the financial year ending 31 March 2021, specifically the amount recognised in the statement of financial position. (3 marks) 3.4) Assume Pro Limited had a 31 May financial year-end. Discuss the effect that the difference in reporting periods will have on the consolidation. (13 marks)