13/09/2020 Due Date: Total Marks POOD 9 200 1700 KGOSIKHULU operated as a single company, but in 2018 decided to expand its operations. KGOSIKHULU acquired a 60% interest in Bame on 1 July 2018 for P 2 000 000 The statements of comprehensive income of KGOSIKHULU and Bame for the year ended 31 December 2019 are as follows: KGOSIKHULU Bame PODO Revenue 22 800 4300 Cost of sales (13 800) 2600) Gross profit Distribution costs (2900) 500) Administration expenses (1 800) (300) Finance costs (200) (70) Finance Income 50 Profit before tax 4350 830 Income tax expenses 101 220 Profit for the year 3050 Other comprehensive income for the year net tax 1600 160 Total comprehensive income for the you 4650 700 Since acquisition, KGOSIKHULU purchased P320 000 of goods from Bame. Of these, P60 000 remained in inventories at the year end. Bame makes a mark on cost of 20% under the transfer pricing agreement between the two companies. The fair value of the identifiable net assets of Bame on purchases were P200 000 greater than their book value. The difference relates to properties with a remaining useful life of 20 years. On the acquistion date KGOSIKHULU advanced a loan to Bame amounting to P800 000 at a prefential interest rate of 5%. The loan is due for repayment in 2023. Statement of changes inEquity (extracts) for two companies: KGOSIKHULU Bame Reserve Reserve POOO PODO Balance at 1 January 2019 12750 2480 Dividend paid (900) Total comprehensive income for the year Balance at 31 December 2019 16 500 3270 KGOSIKHULU and Bame had P400 00 and P150 000 of share capital in issue throughout the period respectively. REQUIRED: Prepare the consolidated statement of comprehensive income and statement of changes inequity (extract reserves) for KGOSIKHULU Group for the year ended 31 December 2019. No adjustments for impairment losses were necessary during the group finacial statements. Assume income and expenses (other intragroup items) accrue evenly. (20 marks) ASSIGNMENT TWO QUESTION 2 [20 MARKS] Lijuta Ltd Co held shares in two companies Lenah and Bilson for a number of years. As at 31 December 2019 they have the following statements of finacial position. Lija Lenah Bilson POCO POCO POOD Non Current Assets Property Plant and equipment 370 190 250 Investments 218 588 190 260 Current assets Inventories 160 100 180 Trade receivables 170 90 100 Cash 50 4010 380 230 290 Equity Share capital (P1) Share premuim Retained earnings Current liabilities Trade payables 200 80 50 100 80 30 588 200 400 868 360 480 100 60 70 958 420 550 Additional information: i. The investments in the statement of financial position comprise solely Alstair Iron's investment in Lenah (P128 000) and in Bilson(P90 000). ii. The 48 000 shares in Lenah were acquired when Lenah reatined earnings balance stood ar P20 000. The P15 000 shares in Bilson were acquired when that company had a retained earnings balance of P150 000 When Lijuta acquired its shares in Lenah their fair value of Lenah's net assets equalled their book values with the following exceptions: POOO Property Plant and Equipment 50 higher Inventories 20 lower (sold during 2018) Depreciation arising on the fair value adjustment to non current assets since this date is P5 000 iii. During the year, Lijuta sold inventories to Lenah for P16 000 which originally cost Alstair Iron P10 000. Three quarters of these inventories have subsequently be sold by Von Solms. iv. No impairment losses on goodwill had been necessary by 31 December 2019. REQUIRED: Produce a consolidated statement of financial position for the group incorporating associate). It is the group policy to value non-controlling interest at its proportionate share of the fair value of the subsidiary,s identifiable net assets. (20 market 13/09/2020 Due Date: Total Marks POOD 9 200 1700 KGOSIKHULU operated as a single company, but in 2018 decided to expand its operations. KGOSIKHULU acquired a 60% interest in Bame on 1 July 2018 for P 2 000 000 The statements of comprehensive income of KGOSIKHULU and Bame for the year ended 31 December 2019 are as follows: KGOSIKHULU Bame PODO Revenue 22 800 4300 Cost of sales (13 800) 2600) Gross profit Distribution costs (2900) 500) Administration expenses (1 800) (300) Finance costs (200) (70) Finance Income 50 Profit before tax 4350 830 Income tax expenses 101 220 Profit for the year 3050 Other comprehensive income for the year net tax 1600 160 Total comprehensive income for the you 4650 700 Since acquisition, KGOSIKHULU purchased P320 000 of goods from Bame. Of these, P60 000 remained in inventories at the year end. Bame makes a mark on cost of 20% under the transfer pricing agreement between the two companies. The fair value of the identifiable net assets of Bame on purchases were P200 000 greater than their book value. The difference relates to properties with a remaining useful life of 20 years. On the acquistion date KGOSIKHULU advanced a loan to Bame amounting to P800 000 at a prefential interest rate of 5%. The loan is due for repayment in 2023. Statement of changes inEquity (extracts) for two companies: KGOSIKHULU Bame Reserve Reserve POOO PODO Balance at 1 January 2019 12750 2480 Dividend paid (900) Total comprehensive income for the year Balance at 31 December 2019 16 500 3270 KGOSIKHULU and Bame had P400 00 and P150 000 of share capital in issue throughout the period respectively. REQUIRED: Prepare the consolidated statement of comprehensive income and statement of changes inequity (extract reserves) for KGOSIKHULU Group for the year ended 31 December 2019. No adjustments for impairment losses were necessary during the group finacial statements. Assume income and expenses (other intragroup items) accrue evenly. (20 marks) ASSIGNMENT TWO QUESTION 2 [20 MARKS] Lijuta Ltd Co held shares in two companies Lenah and Bilson for a number of years. As at 31 December 2019 they have the following statements of finacial position. Lija Lenah Bilson POCO POCO POOD Non Current Assets Property Plant and equipment 370 190 250 Investments 218 588 190 260 Current assets Inventories 160 100 180 Trade receivables 170 90 100 Cash 50 4010 380 230 290 Equity Share capital (P1) Share premuim Retained earnings Current liabilities Trade payables 200 80 50 100 80 30 588 200 400 868 360 480 100 60 70 958 420 550 Additional information: i. The investments in the statement of financial position comprise solely Alstair Iron's investment in Lenah (P128 000) and in Bilson(P90 000). ii. The 48 000 shares in Lenah were acquired when Lenah reatined earnings balance stood ar P20 000. The P15 000 shares in Bilson were acquired when that company had a retained earnings balance of P150 000 When Lijuta acquired its shares in Lenah their fair value of Lenah's net assets equalled their book values with the following exceptions: POOO Property Plant and Equipment 50 higher Inventories 20 lower (sold during 2018) Depreciation arising on the fair value adjustment to non current assets since this date is P5 000 iii. During the year, Lijuta sold inventories to Lenah for P16 000 which originally cost Alstair Iron P10 000. Three quarters of these inventories have subsequently be sold by Von Solms. iv. No impairment losses on goodwill had been necessary by 31 December 2019. REQUIRED: Produce a consolidated statement of financial position for the group incorporating associate). It is the group policy to value non-controlling interest at its proportionate share of the fair value of the subsidiary,s identifiable net assets. (20 market