Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
The trial balances of Hortic Ltd and Agric Ltd for the financial year ended 31 December 2019 are as follows:
Debits Hortic Ltd R
Agric Ltd R
Property, plant and equipment 12 000 000 2 550 000 Investment in Agric Ltd 900 000 ‐ Inventory 1 050 000 900 000 Debtor: Agric Ltd 150 000 ‐ Other assets 2 700 000 300 000 Cost of sales 6 600 000 2 100 000 Other expenses 900 000 150 000 Income tax expense 750 000 450 000 Dividends declared and paid 600 000 450 000 25 650 000 6 900 000 Credits Ordinary share capital
7 500 000 1 500 000 Retained earnings: 1 January 2019 6 000 000 750 000 Trade payables and other liabilities 1 050 000 450 000 Creditor: Hortic Ltd ‐ 150 000 Revenue 10 500 000 4 050 000 Dividends received 600 000 ‐ 25 650 000 6 900 000 Additional information:
- Hortic Ltd acquired 35% of Agric Ltd during 2016 for R900 000, when Agric Ltd’s retained earnings were R450 000.
Hortic Ltd exercises significant influence over the accounting policies and management of Agric Ltd.
- All Agric Ltd’s assets and liabilities were fairly valued at the date of the acquisition of its shares by Hortic Ltd and Agric Ltd had no unrecognised assets or liabilities and no contingent liabilities at the date of acquisition.
- During 2019, Agric Ltd sold inventory to Hortic Ltd at a mark‐up of 100% on cost. These sales amounted to R600 000 for the year. Hortic Ltd still had inventory purchased from Agric Ltd of R120 000 on hand at 31 December 2019.
- The SA normal tax rate is 28%
- The Hortic Ltd Group accounts for investments in associates using the equity method in accordance with IAS 28.
- The carrying amount of the investment in Agric Ltd is considered to be its fair value.
Required:
Q.2.1 Prepare the pro‐forma journal entries for the Hortic Ltd Group to reflect the equity accounting of the associate for the year ended 31 December 2019.
(13) Q.2.2 Prepare the group annual financial statements for the Hortic Ltd Group for the year ended 31 December 2019:
- Consolidated statement of profit or loss and other comprehensive income (3½)
- Consolidated statement of changes in equity (3½)
- Consolidated statement of financial position (5)
(No notes or comparatives are required but in all other respects your answer must comply with International financial reporting standards (IFRS)
(12) Q.2.3 Prepare the supporting note to the statement of financial position for the “Investment in Associate” (5)
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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