QUESTION ONE [30] At date of incorporation of Star Limited (1 July 2017), Rail Limited acquired 80 000 ordinary shares of 50c each in Star Limited. The following represented the trial balances of Rail Limited and Star Limited at 30 June 2019: Rail Limited Star Limited R R Credits 200 000 50 000 70 000 55 000 90 000 50 000 Ordinary Shares of 50c each Retained Earnings Trade and other Payables Accumulated Depreciation Non-Distributable Reserve Revaluation of Land and Buildings Interest Bearing Borrowing - Rail Ltd 86 000 64 000 50 000 24 000 100 000 Bank Overdraft - SetBank 100 000 596 000 343 000 Debits 200 000 67 000 Land and Buildings at Valuation Plant and Equipment at cost price Trade and other Receivables 110 000 170 000 20 000 26 000 Bank - SetBank 46 000 Inventories 68 000 34 000 Loan - Star Limited 150 000 Investment in Star Limited 48 000 596 000 343 000 Additional information: 1. Since Rail Limited acquired its interest in Star Limited, Rail Limited has purchased all its inventories from Star Limited. Star Limited sells all its inventories at cost plus 25%. On 30 June 2018 Rail Limited had R80 000 inventories on hand. 2. R Limited posted a cheque of R50 000 to Star Limited on 25 June 2019. The cheque got mislaid in the post and the cheque was cancelled. 3. Assume cost price equals fair value. Required: Prepare the Statement of Financial Position. (Show all calculations) QUESTION ONE [30] At date of incorporation of Star Limited (1 July 2017), Rail Limited acquired 80 000 ordinary shares of 50c each in Star Limited. The following represented the trial balances of Rail Limited and Star Limited at 30 June 2019: Rail Limited Star Limited R R Credits 200 000 50 000 70 000 55 000 90 000 50 000 Ordinary Shares of 50c each Retained Earnings Trade and other Payables Accumulated Depreciation Non-Distributable Reserve Revaluation of Land and Buildings Interest Bearing Borrowing - Rail Ltd 86 000 64 000 50 000 24 000 100 000 Bank Overdraft - SetBank 100 000 596 000 343 000 Debits 200 000 67 000 Land and Buildings at Valuation Plant and Equipment at cost price Trade and other Receivables 110 000 170 000 20 000 26 000 Bank - SetBank 46 000 Inventories 68 000 34 000 Loan - Star Limited 150 000 Investment in Star Limited 48 000 596 000 343 000 Additional information: 1. Since Rail Limited acquired its interest in Star Limited, Rail Limited has purchased all its inventories from Star Limited. Star Limited sells all its inventories at cost plus 25%. On 30 June 2018 Rail Limited had R80 000 inventories on hand. 2. R Limited posted a cheque of R50 000 to Star Limited on 25 June 2019. The cheque got mislaid in the post and the cheque was cancelled. 3. Assume cost price equals fair value. Required: Prepare the Statement of Financial Position. (Show all calculations)
