Memo

Kgotso & Themba

Kgotso Ltd Themba Ltd

STATEMENT OF FINANCIAL POSITION Pro forma journals CONSOLIDATED
AT 30 DECEMBER 2013 R R
ASSETS
Non-current assets
Property plant and equipment 162,600 133,500 296,100 1
Financial assets: Investments
90 000 shares at cost in Themba Ltd 89,400 - 89,400 - 1
Loan to Themba Ltd 45,000 - 45,000 - 1
30 000 shares at cost in Tlotlo Ltd 30,000 30,000 60,000 1
Deferred tax 12,000 - 12,000 - 1

Current assets
Inventory 37,500 52,500 - 2,700 1,500 - 300 88,500 2.5
Accounts receivable 31,500 28,500 60,000 1
Current Account – Kgotso Ltd 9,000 - 9,000 - 1
Dividends receivable – Tlotlo Ltd 1,500 1,500 3,000 1
Bank: Commerce Bank Ltd 16,500 1,500 18,000 1
426,000 255,000 525,600
EQUITY AND LIABILITIES
Share capital and reserves -
Share capital: Ordinary shares @ R1 each 112,500 - 112,500 - 1
Ordinary shares @ R2 each 225,000 225,000 0.5
General reserve 37,500 30,000 - 12,000 - 2,100 - 1,500 51,900 2.5
Retained earnings 22,500 15,000 Comes from statement of change in equity 41,700

Non-controlling interest 26,100 2,100 600 2,700 31,500 2

Non-current liabilities
10% Debentures 90,000 45,000 - 30,000 105,000 1.5
10% Loan – Kgotso Ltd 15,000 - 15,000 - 1
Deferred tax 18,000 - 12,000 6,000 1

Current liabilities
Income tax payable 5,000 3,000 8,000 1
Accounts payable 40,000 9,000 49,000 1
Bank – Finance Bank Ltd 7,500 7,500 0.5
Current account – Themba Ltd 6,000 1,500 1,500 - 9,000 - 2
426,000 255,000 525,600

Kgotso Ltd Themba Ltd

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013
R R
Operating profit for the year 135,000 76,500 - 2,700 - 300 208,500 2
Other income 30,000 3,000 - 3,000 30,000 1.5
Other expenses - 75,000 - 57,000 3,000 - 129,000 1.5
SA normal company taxation - 36,000 - 9,000 - 45,000 1
Profit for the year 54,000 13,500 64,500

Attributeable to
Parent 61,800 0.5
Non-controlling interest 2,700 1
64,500

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR

ENDED 31 DECEMBER 2013
RETAINED EARNINGS

Kgotso Ltd Themba Ltd

R R
Balance at 1 January 2013 17,250 9,000 - 6,000 15,000 - 600 34,650 2.5
Profit for the year 54,000 13,500 Comes from statement of profit or loss 61,800
Transfer to general reserve - 15,000 - 7,500 1,500 - 21,000 1.5
Dividends declared - 33,750 - 33,750 0.5
Balance at 31 December 2013 22,500 15,000 41,700

Financials 37.5
Calcs 9.5

At Acquistion Journal

Dr. Share capital (SOFP) 112,500

Dr. Retained earnings (SOFP) 6,000
Dr. General reserve (SOFP) 12,000
Cr. Gain on bargain purchase - Retained earnings (SOFP) 15,000 1
Cr. Investment in Themba (SOFP) 89,400 2 (112 500 + 6 000 + 12 000)*80% 104,400 - 15,000
Cr. Non-controlling Interest (SOFP) 26,100 0.5 (112 500 + 6 000 + 12 000)*20% 26,100 0.800

Intragroup Transactions

Sale of Inventory
Closing Inventory
Dr. Cost Of sales (P/L) 2,700
Cr. Inventory (SOFP) 2,700 1 (13 500* 25/125)

Intercompany - Balances
Dr. Loan from Kgotso (SOFP) 15,000
Cr. Loan to Themba (SOFP) 15,000

Dr. Debentures (SOFP) 30,000

Cr. Loan to Themba (SOFP) 30,000

Dr. Interest Received (P/L) 3,000 (30 000*10%)

Cr. Interest Paid (P/L) 3,000

Growth in reserves
Dr. General reserve (SOFP) 2,100
Cr. Non-controlling Interest (SOFP) 2,100 1 (22 500 - 12 000)*20%

Dr. General reserve (SOFP) 1,500

Cr. Transfer to general reserve (SOCE) 1,500 1 (7 500 *20%)

Growth in retained earnings

Dr. Retained earnings (SOFP) 600
Cr. Non-controlling Interest (SOFP) 600 1 (9 000 - 6 000)*20%

Growth in Profit for the year

Dr. Non-controlling Interest (P/L) 2,700
Cr. Non-controlling Interest (SOFP) 2,700 1 (13 500 * 20%)

Profit for the year 13,500

13,500

Dr. Cost Of sales (P/L) 300

Cr. Inventory (SOFP) 300 1 (1 500* 25/125)

Dr. Inventory (P/L) 1,500

Cr. Current account - Themba (SOFP) 1,500

Dr. Bank (SOFP) 1,500

 Cr. Current account - Themba (SOFP) 1,500

Dr. Current account - Themba (SOFP) 9,000

Cr. Current account - Kgotso (SOFP) 9,000
Memo
Kgotso & Themba

Kgotso Ltd Themba Ltd

STATEMENT OF FINANCIAL POSITION Pro forma journals CONSOLIDATED
AT 30 DECEMBER 2013 R R
ASSETS
Non-current assets
Property plant and equipment 162,600 133,500 296,100 1
Financial assets: Investments
90 000 shares at cost in Themba Ltd 89,400 - 89,400 - 1
Loan to Themba Ltd 45,000 - 45,000 - 1
30 000 shares at cost in Tlotlo Ltd 30,000 30,000 60,000 1
Deferred tax 12,000 756 84 - 12,840 - 2

Current assets
Inventory 37,500 52,500 - 2,700 1,500 - 300 88,500 2.5
Accounts receivable 31,500 28,500 60,000 1
Current Account – Kgotso Ltd 9,000 - 9,000 - 1
Dividends receivable – Tlotlo Ltd 1,500 1,500 3,000 1
Bank: Commerce Bank Ltd 16,500 1,500 18,000 1
426,000 255,000 525,600
EQUITY AND LIABILITIES
Share capital and reserves -
Share capital: Ordinary shares @ R1 each 112,500 - 112,500 - 1
Ordinary shares @ R2 each 225,000 225,000 0.5
General reserve 37,500 30,000 - 12,000 - 2,100 - 1,500 51,900 2.5
Retained earnings 22,500 15,000 Comes from statement of change in equity 42,540

Non-controlling interest 26,100 2,100 600 2,700 31,500 2

Non-current liabilities
10% Debentures 90,000 45,000 - 30,000 105,000 1.5
10% Loan – Kgotso Ltd 15,000 - 15,000 - 1
Deferred tax 18,000 - 12,840 5,160 1

Current liabilities
Income tax payable 5,000 3,000 8,000 1
Accounts payable 40,000 9,000 49,000 1
Bank – Finance Bank Ltd 7,500 7,500 0.5
Current account – Themba Ltd 6,000 1,500 1,500 - 9,000 - 2
426,000 255,000 525,600
 Kgotso Ltd Themba Ltd
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013
R R
Operating profit for the year 135,000 76,500 - 2,700 - 300 208,500 2
Other income 30,000 3,000 - 3,000 30,000 1.5
Other expenses - 75,000 - 57,000 3,000 - 129,000 1.5
SA normal company taxation - 36,000 - 9,000 756 84 - 44,160 1
Profit for the year 54,000 13,500 65,340

Attributeable to
Parent 62,640 0.5
Non-controlling interest 2,700 1
65,340

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR

ENDED 31 DECEMBER 2013
RETAINED EARNINGS

Kgotso Ltd Themba Ltd

R R
Balance at 1 January 2013 17,250 9,000 - 6,000 15,000 - 600 34,650 2.5
Profit for the year 54,000 13,500 Comes from statement of profit or loss 62,640
Transfer to general reserve - 15,000 - 7,500 1,500 - 21,000 1.5
Dividends declared - 33,750 - 33,750 0.5
Balance at 31 December 2013 22,500 15,000 42,540

Financial statements 38.5

calc 10.5

At Acquistion Journal

Dr. Share capital (SOFP) 112,500

Dr. Retained earnings (SOFP) 6,000
Dr. General reserve (SOFP) 12,000
Cr. Gain on bargain purchase - Retained earnings (SOFP) 15,000 1
Cr. Investment in Weasel (SOFP) 89,400 2 (112 500 + 6 000 + 12 000)*65% 104,400 - 15,000
Cr. Non-controlling Interest (SOFP) 26,100 0.5 (112 500 + 6 000 + 12 000)*35% 0.800

Intragroup Transactions

Sale of Inventory
Closing Inventory
Dr. Cost Of sales (P/L) 2,700
Cr. Inventory (SOFP) 2,700 1 (13 500* 25/125)

Dr. Deferred taxation (SOFP) 756

Cr. Deferred taxation (P/L) 756 0.5 (p - 28%)
Intercompany - Balances
Dr. Loan from Kgotso (SOFP) 15,000
Cr. Loan to Themba (SOFP) 15,000

Dr. Debentures (SOFP) 30,000

Cr. Loan to Themba (SOFP) 30,000

Dr. Interest Received (P/L) 3,000 (30 000*10%)

Cr. Interest Paid (P/L) 3,000

Growth in reserves
Dr. General reserve (SOFP) 2,100
Cr. Non-controlling Intere(SOFP) 2,100 1 (22 500 - 12 000)*20%

Dr. General reserve (SOFP) 1,500

Cr. Transfer to general r (SOCE) 1,500 1 (7 500 *20%)

Growth in retained earnings

Dr. Retained earnings (SOFP) 600
Cr. Non-controlling Intere(SOFP) 600 1 (9 000 - 6 000)*20%

Growth in Profit for the year

Dr. Non-controlling Interest (P/L) 2,700
Cr. Non-controlling Intere(SOFP) 2,700 1 (13 500 * 20%)

Profit for the year 13,500

13,500

Dr. Cost Of sales (P/L) 300

Cr. Inventory (SOFP) 300 1 (1 500* 25/125)

Dr. Deferred taxation (SOFP) 84

Cr. Deferred taxation (P/L) 84 0.5 (p - 28%)

Dr. Inventory (P/L) 1,500

Cr. Current account - Th (SOFP) 1,500

Dr. Bank (SOFP) 1,500

Cr. Current account - Th (SOFP) 1,500

Dr. Current account - Th (SOFP) 9,000

Cr. Current account - Kgo(SOFP) 9,000