Exam (elaborations)
FAC3764 Assignment 8 Year Module (Due: 25 August 2023)
- Course
- Financial Accounting
- Institution
- University Of South Africa (Unisa)
FAC3764 Assignment 8 Year Module (Due: 25 August 2023)
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FAC3764
ASSIGNMENT 8 (SEMESTER 0)
DUE DATE: 25 August 2023
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no later than
25 August 2023. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1: (25 marks)
(a) Calculate the carrying amount of the Investment in Associate that will be presented in the
consolidated statement of financial position of the Kingsley Ltd Group as at 31 March 2023.
ANSWER:
Carrying Amount of Investment in Associate (Hilton Ltd)
To calculate the carrying amount of the investment in Hilton Ltd as of 31 March 2023, we need to
consider the equity method of accounting for associates. The equity method involves recognizing the
investment initially at cost and subsequently adjusting it for the investor's share of the associate's post-
acquisition profit or loss and other changes in equity.
Given information:
• Kingsley Ltd acquired 40,500 ordinary shares in Hilton Ltd on 1 July 2021.
• Total consideration paid: R239,500 (R115,700 in cash + R123,800 land).
• Significant influence over Hilton Ltd since 1 July 2021.
• Hilton Ltd's equity as of 31 March 2023:
• Share capital: R202,500
• Retained earnings: R3,115,287
• Revaluation reserve: R82,900
First, we need to calculate the investor's share of post-acquisition profit or loss in Hilton Ltd for the
period from 1 July 2021 to 31 March 2023:
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