SunPower LtdHydro LtdDebitsProperty, plant, and equipment at carrying amount .................2 900 0002 600 000Investment in Hydro Ltd at fair value (cost price: R790 000) ...790 0000Financial assets at amortised cost ..........................................150 0000Inventory .................................................................................1 650 0001 850 000Trade and other receivables ....................................................950 0001 255 000Bank Star Bank ...................................................................1 311 6000Dividends declared 28 February 2022 ..................................60 00040 000Cost of sales............................................................................1 350 0001 150 000Other expenses .......................................................................500 000400 000Income tax expense ................................................................313 400291 0009 975 0007 586 000CreditsShare capital ordinary shares (150 000/100 000 shares) .....1 200 0001 100 000Revaluation surplus .................................................................550 000500 000Retained earnings 1 March 2021 .........................................3 000 0001 500 000Long-term borrowings .............................................................1 420 000865 000Dividends payable ...................................................................0150 000Bank overdraft Light Bank ....................................................050 000Trade and other payables .......................................................950 000946 000Sales .......................................................................................2 375 0002 075 000Other income ...........................................................................480 000400 0009 975 0007 586 000

Additional information 1. SunPower Ltd acquired a 60% interest in Hydro Ltd on 1 March 2019. On the acquisition date Hydro Ltds equity included retained earnings of R1 000 000 and a revaluation surplus amounting to R70 000. The issued share capital of both companies remained unchanged since the incorporation of the companies. Assume that the carrying amounts of all the assets and liabilities of Hydro Ltd were equal to the fair values at acquisition. On 28 February 2022, property was revalued in Hydro Ltd, and this was included in its financial records. No other revaluations occurred since acquisition. 4 2. Assume that each ordinary share carries one vote and that voting rights alone determine control. It is group policy to show goodwill at cost less impairment in the consolidated financial statements. Goodwill was not impaired during the current financial year. 3. Since 1 March 2020, Hydro Ltd sells inventory to SunPower Ltd at a mark-up of 25% on cost. Inventory amounting to R360 000 in total, had been purchased by SunPower Ltd from Hydro Ltd in the current financial year. On 28 February 2022, SunPower Ltd had inventory amounting to R120 000 on hand, that was bought from Hydro Ltd. For the 2021 financial year-end, SunPower Ltds inventory included an amount of R90 000, which SunPower Ltd acquired from Hydro Ltd. 4. On 1 September 2020, SunPower Ltd sold a machine with a carrying amount of R210 000 to Hydro Ltd for R260 000. It is the groups policy to recognise depreciation on this equipment on the straight-line method at a rate of 20% per annum. 5. Assume that the profit after tax for Hydro Ltd amounts to R634 000 for the 2022 financial year.

The pro-forma journal entry to eliminate the prior year intragroup depreciation resulting from the sale of machinery is: