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FAC2602 Assignment 2

This document contains an assignment submission for a selected accounting standards course. It includes: 1) Pro forma consolidated journal entries for a group structure to eliminate intragroup balances and transactions between Begonia Ltd (parent) and Daisy Ltd (subsidiary). 2) Consolidated financial statements for the group for the year ended 28 February 2022, including a statement of profit or loss, statement of changes in equity, and statement of financial position. 3) A brief explanation of the basic consolidation principle to eliminate intragroup transactions and dividends before compiling consolidated financial statements.

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348 views

FAC2602 Assignment 2

This document contains an assignment submission for a selected accounting standards course. It includes: 1) Pro forma consolidated journal entries for a group structure to eliminate intragroup balances and transactions between Begonia Ltd (parent) and Daisy Ltd (subsidiary). 2) Consolidated financial statements for the group for the year ended 28 February 2022, including a statement of profit or loss, statement of changes in equity, and statement of financial position. 3) A brief explanation of the basic consolidation principle to eliminate intragroup transactions and dividends before compiling consolidated financial statements.

Uploaded by

Sibongile
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Student number: 46251944

Assignment number: 221731

ASSIGNMENT NO. 2
FAC2602
Selected Accounting Standards and Simple
Group Structure

Name: Sibongile Thekiso


3-31-2022
Student number: 46251944

PART A
Pro – Forma consolidated journal entries

Dr Cr
Retained earnings – Begonia Ltd 80 000
Machinery – Daisy Ltd 80 000
(230 000 -150 000)

Accumulated Depreciation – Daisy Ltd 4 000


Retained earnings – Begonia Ltd 4 000
(80 000 x 20% x 3/12)

Accumulated depreciation – Daisy Ltd 12 000


Depreciation – Begonia Ltd 12 000
(80 000 x 20% x 9/12)

Cost of Sales – Daisy Ltd 118 000


Inventory – Begonia Ltd 118 000
Begonia Ltd (680 000 – 90 000 x 25/125)
Student number: 46251944

PART B

(a)

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 28
FEBRUARY 2022

Revenue (5 000 000 + 3 500 000 – 1 090 000 – 80 000) ………………………….7 330 000
Cost of sales (2 000 000 + 1 400 000 – 1 090 000 – 118 000) ………………….. (2 192 000)
Gross Profit.……………………………………………………………………………… 5 138 000
Other income (480 000 + 350 000 – 32 000 – 3000) ………………………………….795 000
Other expenses (500 000 + 470 000 – 12 000) ……………………………………… (958 000)
Finance costs (100 000 + 80 000)…………………………………………………....... (180 000)
Profit Before tax ………………………………………………………………………. 4 795 000
Income tax expense (306 400) + 532 000) …………………………………………… (838 400)
PROFIT FOR THE YEAR ………………………………………………………………3 956 600
Other comprehensive income for the year ……………………………………….. -
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ……………………………3 956 600
Total comprehensive income attributed to:
- Owners of the parent (3 956 600 – 268 000) ……………………………….. 3 688 600
- Non – controlling interest (261 000 + 7 000) ……………………………….. 268 000
3 956 600
Student number: 46251944

PART B (Continues)
(b)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 28
FEBRUARY 2022

Ordinary Retained Total Non- Total


Share earnings controlling Equity
Capital interest
(1) (2)
Balances at 01/03/2021 400 000 3 255 000 3 655 000 457 000 3 712 000
Changes in equity for 2022
Total comprehensive income for the year
Profit for the year
3 688 600 3 688 600 268 000 3 956 600
Dividends paid: Ordinary shares (80 000) (80 000) (6 000) (86 000)
Preference shares (7 000) (7 000)

400 000 6 863 600 7 268 000 712 000 7 575 600

(1) 3 370 000 + 3 000 – 118 000 = 3 255 000


(2) 380 000 + 70 000 + 7 000 = 457 000

(c)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 28 FEBRUARY 2022
ASSETS
Non-current assets
Property, plant and equipment (3 000 000 + 2 500 000 ……………………………... 5 403 000
-80 000 -17 000) ________
5 403 000

Current Assets
Inventory (700 000 + 680 000 – (680 000 x 25/125) …………………………………. 1 516 000
Trade and other receivables (350 000 + 253 000) ……………………………………. 603 000
Cash and cash equivalent (1 683 000 + 1 092 000) …………………………………. 2 775 000
4 894 000
TOTAL ASSETS 10 297 000
Student number: 46251944

PART C
The basic consolidation principle states that all intragroup transactions before we compile
the consolidated annual financial statements must be eliminated. We eliminate all dividends
paid and/or declared by the subsidiary.

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