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FAC2602-26-S1

FAC2602-26-S1

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How should Elsie Ltd's R270 000

profit for the financial year 2026 be apportioned between the pre-acquisition

(1 January- 30 June) and post-acquisition (1 July - 31 December periods for

consolidation purposes, assuming it was earned evenly?

Pre-acquisition R112 500, Post-acquisition R157 500

Pre-acquisition R0,

Post-acquisition R270 000.

Pre-acquisition R135 000,

Post-acquisition R135 000.

100%

Pre-acquisition R270 000,

Post-acquisition R0.

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Why is only the parent company's share capital included in consolidated financial statements?

To represent the ownership structure of the parent in the group.

100%

To simplify the consolidation process of the group

To avoid overstating the share capital of the group

To present balances that relates to transactions with external parties only, in the group.

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The Inventories in the consolidated statement of financial position amounts to:

R335 000

Why is it necessary to prepare consolidated financial statements for a group of companies?

To comply with the subsidiary’s legal obligation to

prepare financial statements for external users.

To comply with the parent’s moral obligation to

prepare financial statements for external users.

To ensure that all

inter-company transactions are included in the group’s reported profit.

To present the financial position and performance of the parent and subsidiary as a single economic entity.

100%

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What is the Ordinary share capital in the Kholiswa Group Limited consolidated statement of financial position for 31 December 2026 amount to:

The Investment in Elsie Limited in the consolidated statement of financial position amounts to:

What is the pro forma

consolidation journal entry to eliminate the intragroup loan balance at 31 December 2026?

Dr Cash R45 000; Cr Loan Payable R45 000

No entry is required as the loan balance are eliminated.

Dr Loan from Kholiswa Ltd R45 000; Cr Loan to Elsie Ltd R45 000

Dr Loan to Kholiswa Ltd (Elsie) R45 000; Cr Loan from Elsie Ltd (Kholiswa) R45 000

100%

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Why is the investment in a subsidiary eliminated during consolidation?

To avoid double counting the subsidiarys net assets.

100%

To recognize the parent companys full ownership in the subsidiary.

To simplify the consolidation process.

To increase the parent companys reported assets.

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Assuming Kholiswa Limited acquired 60% of shares in Elsie Limited, what is the value of

the non-controlling interests (NCI) at the acquisition date (1 July 2026)?

R249 000

100%

R155 625

R373 500

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What is the at acquisition pro forma journal entry to consolidate Kholiswa Limited and Elsie Limited on 01 July 2026?

Dr Share Capital (Elsie) R270 000;

Dr Retained Earnings (Elsie) R352 500; Dr

Goodwill R333 125; Cr Investment in Elsie R800 000; Cr Non-controlling interests

R155 625.

100%

Dr Share Capital

(Kholiswa) R1 500 000;

Cr Investment in Elsie R800 000; Cr Non-controlling interests R700 000.

Dr Share Capital (Elsie) R270 000; Dr Retained Earnings

(Elsie) R352 000; Dr Goodwill R23 375; Dr Non-controlling interests R155 625; Cr Investment in Elsie R800 000

Dr Share Capital

(Elsie) R270 000; Dr Retained Earnings (Elsie) R352 000; Cr Investment in Elsie R622 000

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