Question $4$: Complex group statements

$(40$ Marks$)$

The following information was obtained from the trial balance of the group of companies on $30$ June $2024$:

$\backslash$table$[[,$Crude Limited,Petrol Limited,Diesel Limited$],[$R$,$R$,$R$],[$CREDITS:$],[$Share capital $(50000/25000/20000$ shares$),50000,25000,20000],[$Mark$-$to$-$market reserve: $30$ June $2024,10169,-,-],[$Retained earnings: $1$ July $2023,4000,4000,2000],[$Revaluation surplus $($OCI$)$: $30$ June $2024,-,-,8000],[$Deferred tax,$2331,,1492],[$Revenue$,116000,101000,90000],[$Dividends received,$9000,-,-],[,191500,130000,121492],[$DEBITS:$],[$Property$,$ plant and equipment at cost$,24000,49000,31000],[$Investment in Petrol Limited: $22500$ shares at fair value,$39000,-,-],[$Share in Diesel Limited: $6000$ shares at fair value,$22500,-,-],[$Cost of sales $($including depreciation$),72850,48500,69500],[$Income tax expense,$9900,13500,8500],[$Income tax expense $-$ OCI,$-,-,1492],[$Inventory$,16250,10000,8000],[$Dividends paid: $15$ January $2024,7000,9000,3000],[,191500,130000,121492]]$

Additional information:

Investment in Petrol Limited

On $1$ November $2023$ Crude Limited purchased $22500$ shares in Petrol Limited for

Page $6$ of $8$R$31000.$ Crude Limited exercised control over the financial and operating policies of Petrol Limited from this date. The net assets of Petrol Limited were considered to be a fair reflection in terms of the requirements of IFRS $3$ Business Combinations.

$2.$ Investment in Diesel Limited

On $1$ April $2023$ Crude Limited purchased $6000$ shares in Diesel Limited for R$18000,$ when the retained earnings of Diesel Limited amounted to R$500.$ Crude Limited paid a premium to obtained control. Crude Limited has exercised significant influence over the financial and operating policies of Diesel Limited from this date when the fair value of non$-$controlling interest was R$4500.$

$3.$ In all cases, the revenue amounts accrued evenly during the period.

$4.$ Crude Limited remeasured both the investments in Petrol Limited and Diesel Limited to fair value in its separate financial statements and recognised fair value adjustments in an account called mark$-$to$-$market reserve $($other comprehensive income$).$ The mark$-$to$-$market reserve only relates to Crude Limited investments in Petrol Limited and Diesel Limited. The mark$-$tomarket reserve on $1$ July $2023$ amounted to R$1627($after tax$).$

$5.$ It is Crude Limited's accounting policy to consolidate all subsidiaries and to account for all associates in accordance with the equity method in the consolidated financial statements.

$6.$ Crude Limited elected to measure the non$-$controlling interest in Petrol Limited at the proportionate share of the acquiree's identifiable net assets at the acquisition date, while electing to measure the non$-$controlling interest in Diesel Limited at fair value at the acquisition date.

$7.$ On $30$ June $2024,$ Crude Limited purchased all its plant from Petrol Limited. Petrol Limited is a manufacturer of plant and realised a gain of R$5000$ on this particular transaction. Depreciation is provided for using the straight$-$line basis at a rate of $10\%$ on cost$.$

$8.$ The revaluation surplus of R$8000($before tax$)$ of Diesel Limited arose on $30$ June $2024$ when the land was revalued.

Page $7$ of $8$Assume the company tax rate of $28\%$ and CGT rate of $66\mathrm{.}6\%$ for this question.

You are required to:

$4\mathrm{.}1$ Prepare the proforma journal entries to reverse the fair value adjustment on the investments. $(10$ Marks$)$

$4\mathrm{.}2$ Prepare the consolidated statement of financial position for the Crude Limited Group for the year ended $30$ June $2024.$

$(30$ Marks$)$

NOTE:

Round all amounts to the nearest Rand.

Show all calculations.

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