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Question $425$ Marks The following are the summarised balance sheets of Snow Ltd$.$ at $30$ September, years $12$ and $13$:$|$ On $1$ October year $12,$ Hail Ltd$.$ acquired the entire share capital of Snow Ltd$.$ for a cash payment of R$30000$ and the issue of $4000$ shares of R$1$ each at a premium of $25$ cents per share. The following occurred during the year ended $30$ September, year $13$ : Hail Ltd$.$ invoiced goods to Snow Ltd$.$ at cost plus $20\%$ and at the year$-$end R$3600$ of these goods remained unsold. Snow Ltd$.$ made a profit of R$13750$ before charging taxation. At $30$ September, year $12,$ Snow Ltd$.$ made a provision for taxation of R$4750$ for the accounting year to $30$ September, year $12,$ and at $30$ September, year $13,$ a taxation provision of R$6000$ for the accounting year to $30$ September, year $13.$ In determining the price of the shares of Snow Ltd$.$ at $30$ September, year $12,$ it was agreed to revalue at R$15000$ the factory standing in the books at R$12500,$ and at R$10000$ plant having a book value of R$7500,$ but the new values were not recorded in the books. Snow Ltd$.$ provided for R$1500(20\%)$ depreciation on this plant in the year to $30$ September, year $13.$ On $30$ September, year $13,$ stock valued at R$1500$ was in transit from Hail Ltd$.$ to Snow Ltd$.,$ which did not record it in its books until $4$ October, year $13.$ A remittance of R$1000$ from Snow Ltd$.,$ included in the balance at current account, was not recorded by Hail Ltd$.$ until $3$ October, year $13.$ Required Prepare the necessary joumal entries: $($a$)$ to record the acquisition of Snow Ltd$.$ in the books of Hail Ltd$.$; and $($b$)$ the pro forma journal entries required to be added to the trial balance of Hail Ltd$.$ so that the consolidated balance sheet can be prepared at $30$ September, year $13.$ You do not have to prepare the actual balance sheet.

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