what is value of cost of sales in the consolidated statement? Io

Accountants of E$-$Volvo Group

Your help is required for the consolidation of E$-$Volvo Ltd and its subsidiary Lex Ltd for the

year ended $31$ May $2023.$ E$-$Volvo Ltd has introduced electric cars into the market while

Lex Ltd is a company that conducts extensive research on new car models. E$-$Volvo Ltd

acquired its interest in Lex Ltd on $1$ July $2021.$

Yours sincerely$,$

Ms C Carr

CEO $-$ E$-$Volvo Group Additional information

When E$-$Volvo Ltd acquired its $75\%$ interest in Lex Ltd$,$ Lex Ltd had retained earnings

of R$1100000$ and a revaluation surplus amounting to R $340000.$

Assume that the carrying amounts of all the assets and liabilities of Lex Ltd were

equal to the fair values at acquisition, except for land, which was valued R$60000$

higher, but not recorded. The only other revaluation in the group was when Lex Ltd

revalued land again in the current year.

The issued share capital of both companies remained unchanged since the

incorporation of the companies.

Lex Ltd sells specific electronic car spare parts to E$-$Volvo Ltd at favourable rates,

with a markup of only $20\%$ on these sales. Total such sales amounted to R$795000$

for the current financial year. On $31$ May $2022$ E$-$Volvo Ltd had R$1200000$ worth of

these spare parts left in inventory and at the end of the current year those parts had

a value of R$870000$ in E$-$Volvo Ltd$\text{'}$s financial records.

E$-$Volvo Ltd has extensive experience with electronic car equipment, so E$-$Volvo Ltd

is training the Lex Ltd employees in the car factory. This training cost amounts to

R$240000$ for the current year but was not yet paid.

The companies in the group use trade and other receivables and payables for

intragroup debt.

Assume that the profit after tax for Lex Ltd amounts to R$350000$ for the $2023$

financial year and assume you can ignore the taxation effect of unrealised profits or

losses.

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.