The companies declared and paid the following dividends during the current year: Cape Limited Ordinary…

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The companies declared and paid the following dividends during the current year: Cape Limited Ordinary dividends on 28 February 2015 − 10c per share Ordinary dividends on 30 June 2014 − 5c per share Port Limited Ordinary dividends on 28 February 2015 − 5c per share. Cape Ltd guarantees the bank overdraft of Port Ltd for an unlimited amount. REQUIRED: Draft the consolidated statement of financial position of Cape Ltd and its subsidiary at 28 February 2015 according to the requirements of the Companies Act, and Generally Accepted Accounting Practice. Ignore comparative figures and the taxation effect on unrealised profits and/or losses as well as capital gains tax. Do the consolidated journal entries at 28 February 2015 to eliminate the profit and depreciation Associated with the sale of the machine

ScanSolve AI Tutor · Accepted Answer

Here is the consolidated statement of financial position and the required journal entries.

Part 1: Consolidated Statement of Financial Position of Cape Ltd and its Subsidiary Port Ltd as at 28 February 2015

Determine Ownership and Acquisition Adjustments
- Port Ltd's ordinary shares: $\frac{\text{R}100,000}{\text{R}2/\text{share}} = 50,000$ shares.
- Cape Ltd's ownership: $\frac{37,500}{50,000} = 75\%$ .
- Non-Controlling Interest (NCI): $25\%$ .
Calculate Net Assets of

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Determine Ownership and Acquisition Adjustments

Calculate Net Assets of

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