SECTION A: MULTIPLE CHOICE QUESTIONS
QUESTION 1
At date of incorporation of ABC Limited (1 July 2012), XYZ Limited acquired 80 000 ordinary
shares of 50c each in ABC Limited.
The following represented the trial balances of XYZ Limited and ABC Limited at 30 June 2014:
XYZ ABC
Limited Limited
R R
Credits
Ordinary shares of 50c each 200 000 50 000
Retained earnings 70 000 55 000
Trade and other payables 90 000 50 000
Accumulated depreciation 86 000 64 000
Revaluation of land and buildings 50 000 24 000
Interest bearing borrowing - XYZ Limited - 100 000
Bank overdraft - Waterfall Bank 100 000 -
596 000 343 000
Debits
Land and buildings at valuation 200 000 67 000
Plant and equipment at cost price 110 000 170 000
Trade and other receivables 20 000 26 000
Bank - Rapids Bank - 46 000
Inventories 68 000 34 000
Loan - ABC Limited 150 000 -
Investment in ABC Limited at fair value (cost price R48 000) 48 000 -
596 000 343 000
Additional information
1. Since XYZ Limited acquired its interest in ABC Limited, XYZ Limited has purchased all
its inventories from ABC Limited. ABC Limited sells all its inventories at cost plus 25%.
On 30 June 2013 XYZ Limited had R80 000 inventories on hand.
2. XYZ Limited posted a cheque of R50 000 to ABC Limited on 25 June 2014. The cheque
got lost in the post and the cheque was cancelled.
3. ABC Limited bought a machine from XYZ Limited on 30 June 2014. XYZ Limited made a
profit of R30 000 on the sale. Both companies depreciate plant and equipment at 20%
on the straight-line method.
© 2015 Together We Pass. All rights reserved.
,REQUIRED:
After taking the abovementioned information into account, answer the following multiple choice
questions (choose only A, B, C or D) concerning the consolidated statement of financial position
of XYZ Limited and its subsidiary for the financial year ended 30 June 2014 in compliance with
the requirements of the Companies Act, 1973 and Generally Accepted Accounting Practice.
Ignore taxation on unrealised profits and/or losses as well as capital gains tax.
1. Ordinary share capital in the consolidated statement of financial position amounts to:
A. R200 000
B. R250 000
C. R240 000
D. None of the above.
2. Revaluation reserve of land and buildings in the consolidated statement of financial
position amounts to:
A. R69 200
B. R74 000
C. R50 000
D. None of the above.
3. Unrealised profit adjustment on closing inventories in the analysis of shareholders’
equity of ABC Limited amounts to:
A. R16 000
B. R13 600
C. R 6 800
D. None of the above.
4. Retained earnings in the consolidated statement of financial position amount to:
A. R103 120
B. R 84 000
C. R114 000
D. None of the above.
5. Non-controlling interest in the consolidated statement of financial position amounts to:
A. R21 000
B. R25 800
C. R23 080
D. None of the above.
© 2015 Together We Pass. All rights reserved.
,6. Land and buildings in the consolidated statement of financial position amount to:
A. R291 000
B. R267 000
C. R253 600
D. None of the above.
7. Plant and equipment in the consolidated statement of financial position amount to:
A. R130 000
B. R108 800
C. R100 000
D. None of the above.
8. Trade and other receivables in the consolidated statement of financial position amount to:
A. R 40 800
B. R 96 000
C. R146 000
D. None of the above.
9. Inventories in the consolidated statement of financial position amount to:
A. R102 000
B. R 81 600
C. R 95 200
D. None of the above.
10. Cash and cash equivalents/bank overdraft in the consolidated statement of financial
position amount to:
A. Bank overdraft R54 000
B. Cash and cash equivalents R46 000, Bank overdraft R100 000
C. Cash and cash equivalents R46 000, Bank overdraft R50 000
D. None of the above.
11. Trade and other payables in the consolidated statement of financial position amount to:
A. R130 000
B. R140 000
C. R190 000
D. None of the above.
© 2015 Together We Pass. All rights reserved.
, 12. Investment in ABC Limited in the consolidated statement of financial position amounts to:
A. Nil
B. R48 000
C. R 8 000
D. None of the above.
13. Goodwill in the consolidated statement of financial position amounts to:
A. R 8 000
B. R90 000
C. Nil
D. None of the above.
14. Long-term borrowing - XYZ Limited in the consolidated statement of financial position
amounts to:
A. R100 000
B. R150 000
C. R 80 000
D. None of the above.
© 2015 Together We Pass. All rights reserved.
QUESTION 1
At date of incorporation of ABC Limited (1 July 2012), XYZ Limited acquired 80 000 ordinary
shares of 50c each in ABC Limited.
The following represented the trial balances of XYZ Limited and ABC Limited at 30 June 2014:
XYZ ABC
Limited Limited
R R
Credits
Ordinary shares of 50c each 200 000 50 000
Retained earnings 70 000 55 000
Trade and other payables 90 000 50 000
Accumulated depreciation 86 000 64 000
Revaluation of land and buildings 50 000 24 000
Interest bearing borrowing - XYZ Limited - 100 000
Bank overdraft - Waterfall Bank 100 000 -
596 000 343 000
Debits
Land and buildings at valuation 200 000 67 000
Plant and equipment at cost price 110 000 170 000
Trade and other receivables 20 000 26 000
Bank - Rapids Bank - 46 000
Inventories 68 000 34 000
Loan - ABC Limited 150 000 -
Investment in ABC Limited at fair value (cost price R48 000) 48 000 -
596 000 343 000
Additional information
1. Since XYZ Limited acquired its interest in ABC Limited, XYZ Limited has purchased all
its inventories from ABC Limited. ABC Limited sells all its inventories at cost plus 25%.
On 30 June 2013 XYZ Limited had R80 000 inventories on hand.
2. XYZ Limited posted a cheque of R50 000 to ABC Limited on 25 June 2014. The cheque
got lost in the post and the cheque was cancelled.
3. ABC Limited bought a machine from XYZ Limited on 30 June 2014. XYZ Limited made a
profit of R30 000 on the sale. Both companies depreciate plant and equipment at 20%
on the straight-line method.
© 2015 Together We Pass. All rights reserved.
,REQUIRED:
After taking the abovementioned information into account, answer the following multiple choice
questions (choose only A, B, C or D) concerning the consolidated statement of financial position
of XYZ Limited and its subsidiary for the financial year ended 30 June 2014 in compliance with
the requirements of the Companies Act, 1973 and Generally Accepted Accounting Practice.
Ignore taxation on unrealised profits and/or losses as well as capital gains tax.
1. Ordinary share capital in the consolidated statement of financial position amounts to:
A. R200 000
B. R250 000
C. R240 000
D. None of the above.
2. Revaluation reserve of land and buildings in the consolidated statement of financial
position amounts to:
A. R69 200
B. R74 000
C. R50 000
D. None of the above.
3. Unrealised profit adjustment on closing inventories in the analysis of shareholders’
equity of ABC Limited amounts to:
A. R16 000
B. R13 600
C. R 6 800
D. None of the above.
4. Retained earnings in the consolidated statement of financial position amount to:
A. R103 120
B. R 84 000
C. R114 000
D. None of the above.
5. Non-controlling interest in the consolidated statement of financial position amounts to:
A. R21 000
B. R25 800
C. R23 080
D. None of the above.
© 2015 Together We Pass. All rights reserved.
,6. Land and buildings in the consolidated statement of financial position amount to:
A. R291 000
B. R267 000
C. R253 600
D. None of the above.
7. Plant and equipment in the consolidated statement of financial position amount to:
A. R130 000
B. R108 800
C. R100 000
D. None of the above.
8. Trade and other receivables in the consolidated statement of financial position amount to:
A. R 40 800
B. R 96 000
C. R146 000
D. None of the above.
9. Inventories in the consolidated statement of financial position amount to:
A. R102 000
B. R 81 600
C. R 95 200
D. None of the above.
10. Cash and cash equivalents/bank overdraft in the consolidated statement of financial
position amount to:
A. Bank overdraft R54 000
B. Cash and cash equivalents R46 000, Bank overdraft R100 000
C. Cash and cash equivalents R46 000, Bank overdraft R50 000
D. None of the above.
11. Trade and other payables in the consolidated statement of financial position amount to:
A. R130 000
B. R140 000
C. R190 000
D. None of the above.
© 2015 Together We Pass. All rights reserved.
, 12. Investment in ABC Limited in the consolidated statement of financial position amounts to:
A. Nil
B. R48 000
C. R 8 000
D. None of the above.
13. Goodwill in the consolidated statement of financial position amounts to:
A. R 8 000
B. R90 000
C. Nil
D. None of the above.
14. Long-term borrowing - XYZ Limited in the consolidated statement of financial position
amounts to:
A. R100 000
B. R150 000
C. R 80 000
D. None of the above.
© 2015 Together We Pass. All rights reserved.
