QUESTION TWO Incomplete Ltd acquired 70% of shares in NewTech Ltd on 01 January 2017 for R208 000. At this date the retained earnings of the subsidiary were R100 000. At the date of acquisition Incomplete Ltd considered the net assets of NewTech Ltd to be fairly valued in its statement of financial position. The non-controlling interests are recognised at their share of the net identifiable assets of the subsidiary. The following are the summarised Statements of Financial Position of NewTech Ltd as at 31 December 2019: 2019 Assets Non-Current Asset 4 200 000 Inventory 400 000 Receivables 1 550 000 Cash 600 000 6 750 000 Equity and Liabilities Share Capital (R2 shares) Retained Income Long term Debt Payables 4 200 000 600 000 250 000 1 700 000 6 750 000 Required: Using information from question 1 and 2, prepare the Consolidated Statement of Financial Position as at 31 December 2019. STATEMENT OF FINANCIAL POSITION Assets 2019 320 000 (239 000) 81 000 60 000 208 000 349 000 43 000 32 000 24 000 99 000 448 000 Property, plant and equipment (PPE) at cost price Accumulated depreciation PPE at carrying value Goodwill Investment in shares Non-current assets Inventories Trade receivables Cash and cash equivalents Current assets Total assets Equity and liabilities Share capital Retained earnings Ordinary shareholders' equity Total equity Long-term debentures Long-term loan Non-current liabilities Trade payables Other payables Tax payable Current liabilities 200 000 73 200 273 200 273 200 30 000 54 000 84 000 70 000 16 800 4 000 90 800 Total equity and liabilities 448 000 STATEMENT OF COMPREHENSIVE INCOME Turnover Cost of sales and services rendered Gross profit Operating expenses Operating income Operating profit Investment income Finance cost Profit before tax Tax Profit after tax Non-controlling interest Preference share dividends Attributable earnings Ordinary dividends Retained earnings (for the year) 2019 274 000 (207 500) 66 500 (26 500) 1 500 41 500 4 000 (6 000) 39 500 (16 700) 22 800 (1 000) (2 400) 19 400 (3 600) 15 800 Additional information: Purchases on credit for the year amount to R80 000. Lease payments of R10 000 were made during the year. The company has 10 000 ordinary shares in issue. The market price per share amounts to R10. . QUESTION TWO Incomplete Ltd acquired 70% of shares in NewTech Ltd on 01 January 2017 for R208 000. At this date the retained earnings of the subsidiary were R100 000. At the date of acquisition Incomplete Ltd considered the net assets of NewTech Ltd to be fairly valued in its statement of financial position. The non-controlling interests are recognised at their share of the net identifiable assets of the subsidiary. The following are the summarised Statements of Financial Position of NewTech Ltd as at 31 December 2019: 2019 Assets Non-Current Asset 4 200 000 Inventory 400 000 Receivables 1 550 000 Cash 600 000 6 750 000 Equity and Liabilities Share Capital (R2 shares) Retained Income Long term Debt Payables 4 200 000 600 000 250 000 1 700 000 6 750 000 Required: Using information from question 1 and 2, prepare the Consolidated Statement of Financial Position as at 31 December 2019. STATEMENT OF FINANCIAL POSITION Assets 2019 320 000 (239 000) 81 000 60 000 208 000 349 000 43 000 32 000 24 000 99 000 448 000 Property, plant and equipment (PPE) at cost price Accumulated depreciation PPE at carrying value Goodwill Investment in shares Non-current assets Inventories Trade receivables Cash and cash equivalents Current assets Total assets Equity and liabilities Share capital Retained earnings Ordinary shareholders' equity Total equity Long-term debentures Long-term loan Non-current liabilities Trade payables Other payables Tax payable Current liabilities 200 000 73 200 273 200 273 200 30 000 54 000 84 000 70 000 16 800 4 000 90 800 Total equity and liabilities 448 000 STATEMENT OF COMPREHENSIVE INCOME Turnover Cost of sales and services rendered Gross profit Operating expenses Operating income Operating profit Investment income Finance cost Profit before tax Tax Profit after tax Non-controlling interest Preference share dividends Attributable earnings Ordinary dividends Retained earnings (for the year) 2019 274 000 (207 500) 66 500 (26 500) 1 500 41 500 4 000 (6 000) 39 500 (16 700) 22 800 (1 000) (2 400) 19 400 (3 600) 15 800 Additional information: Purchases on credit for the year amount to R80 000. Lease payments of R10 000 were made during the year. The company has 10 000 ordinary shares in issue. The market price per share amounts to R10