Question
The following are the trial balance of Sam Ltd and its subsidiary Pam Ltd for the year ended 31 December 2018: Sam Ltd Pam Ltd
The following are the trial balance of Sam Ltd and its subsidiary Pam Ltd for the year ended 31 December 2018:
Sam Ltd Pam Ltd RR
Issued capital Ordinary shares of R1 each Retained earnings 1 January 2018 Profit before tax Investment in Pam Ltd - 80 000 ordinary shares of R1 each at fair value
Property, plant and equipment Inventories Trade and other receivables Trade and other payables Taxation for the year
(200 000) (120 000) (80 000)
80 000 200 000 50 000
70 000 (30 000) 30 000
(100 000) (80 000)
(60 000)
--- 200 000 30 000
50 000 (60 000)
20 000
Page 4 of 5
Additional information:
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Sam Ltd acquired its interest in Pam Ltd at the time of incorporation of Pam Ltd.
-
Pam Ltd purchased all its inventories from Sam Ltd at cost price plus 25%. The
inventories
-
on Pam Ltds books at 1 January 2018 amounted to R40 000.
-
Total sales of Sam Ltd to Pam Ltd amounted to R100 000 during 2018.
-
Assume that the cost price or carrying amount equals the current fair value.
Required:
Draft the consolidated annual financial statements of Sam Ltd and its subsidiary for the year ended 31 December 2018.
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