Question 1On 2 July 2005, H Ltd. purchased the entire issued ordinary share capital ofS Ltd. On this date, S Ltd. had a retained income balance of R4 000 and nogeneral reserve. Any purchase difference is to be attributed to the fixed assetsof S Ltd. On 30 June 2007, the trial balances of the two companies were asfollows:Share capital (R1 ordinary shares)General reserveRetained incomeAccumulated depreciationFixed assets at costInvestments in S Ltd.Net current assetsuestion 2H Ltd.R40 00010 00034 0006 000R90 00030 00036 00024 000R90 000buildings at costat costin S Ltd.S Ltd.R20 0005 00010 000Note: Included in the net current assets of both companies is a dividend dueby S Ltd. to H Ltd. of R2 000.RequiredDraw up a consolidated balance sheet of H Ltd. and subsidiary S Ltd. on30 June 2007.ordinary R1 shares)R35 00014 000H Ltd.R-21 000R35 000td. bought all the shares in S Ltd. on 30 June 2004 when the retainedme of S Ltd. was R8 000 and the general reserve was R12 000. Thewing list of balances appeared in the books of the two companies onne 2007.60 00044 00080 00048 00060 000R292 000S Ltd.R28 0024 0024 0280R104

Consolidation - Consolidation accounting is the procedure used to merge the financial outcomes of…

Question 1 On 2 July 2005, H Ltd. purchased the entire issued ordinary share capital of S Ltd. On this date, S Ltd. had a retained income balance of R4 000 and no general reserve. Any purchase difference is to be attributed to the fixed assets of S Ltd. On 30 June 2007, the trial balances of the two companies were as follows: Share capital (R1 ordinary shares) General reserve Retained income ppaniation H Ltd. R 40 000 10 000 34 000 6 000 S Ltd. R 20 000 5 000 10 000

Question 1 On 2 July 2005, H Ltd. purchased the entire issued ordinary share capital of S Ltd. On this date, S Ltd. had a retained income balance of R4 000 and no general reserve. Any purchase difference is to be attributed to the fixed assets of S Ltd. On 30 June 2007, the trial balances of the two companies were as follows: Share capital (R1 ordinary shares) General reserve Retained income ppaniation H Ltd. R 40 000 10 000 34 000 6 000 S Ltd. R 20 000 5 000 10 000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 18P

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