The following is the final trial balance of Sampras Ltd for the financial year ended 31 December 2019:

Debits	R
Land	16 000 000
Property, plant and equipment	8 000 000
Inventory	2 000 000
Other assets	6 000 000
	32 000 000
Credits
Ordinary share capital	12 000 000
Retained earnings	16 000 000
Other liabilities	4 000 000
	32 000 000

Additional information:

1. Hennon Ltd acquired 80% (9 600 000 ordinary shares) in Sampras Ltd on 1 January 2020 for R28 000 000.

It was agreed that the full purchase price of R28 000 000 will be settled in cash one year later, on 31 December 2020.

2. Non‐controlling interest is measured at their share of net identifiable assets.

3. It was considered that the carrying amounts of all Sampras Ltd’s assets and liabilities were equal to their fair values except for the following:

	Fair value
Land	20 000 000
Property, plant and equipment	10 000 000
Inventory	3 000 000

4. 
   
5. Sampras Ltd has however not recognised an intangible asset with a fair value of R3 500 000.

5. Sampras Ltd had a contingent liability of R2 000 000 at 31 December 2019 which was also not recognised. This is of a capital nature and will not be allowed as an income tax deduction.

An appropriate discounting rate is 12% p.a. The Hennon Ltd Group uses the partial method to recognise goodwill. Investments in subsidiaries are accounted for at cost in the separate financial statements of Hennon Ltd. The SA normal income tax rate is 28% and the capital gains inclusion rate is 80%. Land and intangible assets are subject to capital gains tax and all other assets are subject to the normal tax rate. Required:
Q.1.1	Calculate the goodwill or gain on bargain purchase price in respect of the acquisition of Sampras Ltd. Show all workings and calculations as marks will be allocated.	(19)
Q.1.2	Prepare the pro‐forma consolidation journal entry for the Hennon Ltd Group at the date of the acquisition of Sampras Ltd.	(11)