On 1 August

2025, Mudiwa Ltd acquired 80% of the ordinary shares in Rudo Ltd for R600,000.

The financial year-end for both companies is 31 December 2025.

The equity of Rudo Ltd on 1 January 2025

(start of the year) was as follows:

• Share capital: R300 000
• Retained earnings: R180 000
• Revaluation surplus: R40 000

On 1 August

2025 (acquisition date), Land was fair value adjusted to R 275 000 from R225 00. This adjustment has not been recorded in Rudo Ltd’s

accounting records.

For the

year ended 31 December 2025, Rudo Ltd reported a profit after tax of R120 000,

which is assumed to have been earned evenly throughout the year.

Both companies declared and paid dividends

during the year.

• Mudiwa Ltd declared dividends of R50 000.

• Rudo Ltd declared dividends of R30 000 on 30 November 2025, after

  the acquisition.

Assume no goodwill impairment and each

ordinary share carries equal voting rights.