QUESTION 4 (12 MARKS; 30 MINUTES) On 1 January 2019, Invisible Connection Ltd acquired 80% in Brilliant Tech Ltd for R550 000. The equity of Brilliant Tech Ltd on date of acquisition was as follows: Share capital R300 000 Retained earnings R140 000 General reserve R90 000 The statements of profit or loss and other comprehensive income of the two entities for the year ended 31 December 2019 are presented below: Statement of profit or loss and other comprehensive income For the year ended 31 December 2019 Invisible Brilliant Connection Tech Ltd 2019 2019 R R Revenue 1 600 000 900 000 Cost of sales (720 000) (405 000) Gross Profit 880 000 495 000 Ltd Other income Operating expenses 32 550 (82 000) 0 (241 500) Profit before interest and tax Finance cost Profit before tax Income tax expense Profit for the year 830 550 (9 600) 820 950 (237 552) 583 398 253 500 (54 000) 199 500 (39 060) 160 440 Total Sub- total 4.5 4.5 REQUIRED - QUESTION 4 4.1 Prepare the at acquisition pro forma journal entry of the Invisible Connection Ltd group Journal narration is not required. 4.2 Prepare the consolidated statement of profit or loss and other comprehensive Income for the Invisible Connection Ltd group for the year ended 31 December 2019 as per IFRS requirements. Comparative figures are not required. Communication skills: Presentation and layout 6.5 1 8 TOTAL MARKS 12 TOTAL: 100