1. Analyse the Equity of S Ltd.

 2. When analyzing the equity of the subsidiary at the acquisition date the fair value adjustment for the land would be replaced by the revaluation surplus: draw up the proforma journal entries to record the elimination of the cost of land.

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P Limited acquired a 60% interest in S Limited at 1 January 2015, Debits: Land Other non-current assets Current assets Investment in S Limited Credits: Share capital Retained earnings Revaluation surplus Liabilities P Limited R 150 000 205 000 145 000 180 000 680 000 240 000 300 000 140.000 680 000 Limited R S 125 000 120 000 130 000 375 000 120 000 150 000 25 000 80.000 375 000 P Limited acquired a 60% interest in S Limited at 1 January 2015, Debits: Land Other non-current assets Current assets Investment in S Limited Credits: Share capital Retained earnings Revaluation surplus Liabilities P Limited R 150 000 205 000 145 000 180 000 680 000 240 000 300 000 140.000 680 000 Limited R S 125 000 120 000 130 000 375 000 120 000 150 000 25 000 80.000 375 000

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1 To analyze the equity of S Limited at the acquisition date January 2015 we need to consider its as... View the full answer