Question Four

X holds shares in Y. On 1 April 2015 X purchased 600,000 shares in Y at a cost of R1.60 per share. The

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Question Four X holds shares in Y. On 1 April 2015 X purchased 600,000 shares in Y at a cost of R150 per share. The fair value of Y's tangible assets at 1 April 2015 was R126,000 more than book value. The retained prots of Y at 1 April 2015 were R120,000. The excess of fair value over book value was attributed to buildings held by Y. At 1 April 2015 the buildings had an estimated remaining useful life of 21 years. The draft summarised financial statements for the two entities as at 3'[ March 2019 are given below". Summarised statement of financial position at 31 March 2019 X Y R000 R000 Non-current assets Property, plant and equipment 1,210 700 Investment in Y at cost 960 2,170 700 Current assets Sundry 1,780 620 Current a/c with Y Ltd 80 1,860 620 Total assets 4,030 1,320 Equity and reserves Equity shares of R1 each 2,000 600 Retained earnings 400 300 2,400 900 Current liabilities Trade payables 1,630 360 Current ate with X pic 60 1,630 420 4,030 1320 Page 5 of 11 Summarised statement of comprehensive income for the year ended 31 March 2019 X R000 Revenue 910 Cost of sales (461) 449 Other income dividends received 50 Expenses (110) 389 Finance cost (30) 359 Taxation (43) Profit for the year 316 Additional information: (i) Y paid an interim dividend of R50,000 on 31 December 2018 (ii) Y sent a cheque for 20,000 to X on 30 March 2019 R000 390 (171) 219 (43) 176 (22) 154 (12) 142 (iii) X occasionally trades with Y. In November 2018 X sold Y goods for R90,000. X uses a mark up of 50% on cost. On 31 March 2019 Y had not paid for the goods and they were all still in Y's closing inventory. Req u i red Prepare a consolidated, summarised statement of comprehensive income for the year ended 31 March 2019 and a consolidated statement of financial position for the X group of entities as at 31 March 2019. (25 marks] Page 6 of 11