3. 4. 5. Fixbox provided Gearup a loan of R250 000 on 1 October 2023. The interest rate on the loan is 10% per annum. All the interest for the 2023 financial year is still due at the financial year-end. No loan repayments were made during the 2023 financial year. Ordinary dividends were declared on 31 December 2023 by both Fixbox and Gearup. The "other income" of Fixbox includes the ordinary dividend income from Gearup. Gearup sold equipment to Fixbox for R120 000 on 31 December 2023. The carrying amount thereof was R90 000. Fixbox classified these assets purchased from Gearup as inventory. The inventory was sold by Fixbox during the 2024 financial year and therefore still on hand at 31 December 2023. Additional information: Fixbox accounts for investments in subsidiaries at cost in accordance with IAS 27.10(a) in its separate financial statements. • Assume that any goodwill arising as a result of a business combination, is not deductible for tax purposes. Fixbox elected to measure the non-controlling interest in Gearup at its proportionate share of Gearup's identifiable net assets at the acquisition date. • All fixed assets have a nil residual value. There have been no changes to the share capital (e.g., number of shares in issue) of Gearup since Fixbox's initial investment in Gearup on 1 July 2022. For all financial years, assume an Income Tax rate of 27%. • Ignore the effects of Dividends Tax and Value Added Tax (VAT). 102 ANNEXURE I: FORMATIVE ASSESSMENT 2 HFAC331-1-Jan-June2024-FA2-SK-V4-07022024 REQUIRED: 1.1 Calculate the goodwill or gain on bargain purchase, in terms of IFRS 3, that arose on the acquisition of Gearup Ltd. • Round off to the nearest Rand, if applicable.
3. 4. 5. Fixbox provided Gearup a loan of R250 000 on 1 October 2023. The interest rate on the loan is 10% per annum. All the interest for the 2023 financial year is still due at the financial year-end. No loan repayments were made during the 2023 financial year. Ordinary dividends were declared on 31 December 2023 by both Fixbox and Gearup. The "other income" of Fixbox includes the ordinary dividend income from Gearup. Gearup sold equipment to Fixbox for R120 000 on 31 December 2023. The carrying amount thereof was R90 000. Fixbox classified these assets purchased from Gearup as inventory. The inventory was sold by Fixbox during the 2024 financial year and therefore still on hand at 31 December 2023. Additional information: Fixbox accounts for investments in subsidiaries at cost in accordance with IAS 27.10(a) in its separate financial statements. • Assume that any goodwill arising as a result of a business combination, is not deductible for tax purposes. Fixbox elected to measure the non-controlling interest in Gearup at its proportionate share of Gearup's identifiable net assets at the acquisition date. • All fixed assets have a nil residual value. There have been no changes to the share capital (e.g., number of shares in issue) of Gearup since Fixbox's initial investment in Gearup on 1 July 2022. For all financial years, assume an Income Tax rate of 27%. • Ignore the effects of Dividends Tax and Value Added Tax (VAT). 102 ANNEXURE I: FORMATIVE ASSESSMENT 2 HFAC331-1-Jan-June2024-FA2-SK-V4-07022024 REQUIRED: 1.1 Calculate the goodwill or gain on bargain purchase, in terms of IFRS 3, that arose on the acquisition of Gearup Ltd. • Round off to the nearest Rand, if applicable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:3.
4.
5.
Fixbox provided Gearup a loan of R250 000 on 1 October 2023. The interest
rate on the loan is 10% per annum. All the interest for the 2023 financial year
is still due at the financial year-end. No loan repayments were made during the
2023 financial year.
Ordinary dividends were declared on 31 December 2023 by both Fixbox and
Gearup. The "other income" of Fixbox includes the ordinary dividend income
from Gearup.
Gearup sold equipment to Fixbox for R120 000 on 31 December 2023. The
carrying amount thereof was R90 000. Fixbox classified these assets
purchased from Gearup as inventory. The inventory was sold by Fixbox during
the 2024 financial year and therefore still on hand at 31 December 2023.
Additional information:
Fixbox accounts for investments in subsidiaries at cost in accordance with
IAS 27.10(a) in its separate financial statements.
• Assume that any goodwill arising as a result of a business combination, is not
deductible for tax purposes.
Fixbox elected to measure the non-controlling interest in Gearup at its
proportionate share of Gearup's identifiable net assets at the acquisition date.
• All fixed assets have a nil residual value.
There have been no changes to the share capital (e.g., number of shares in
issue) of Gearup since Fixbox's initial investment in Gearup on 1 July 2022.
For all financial years, assume an Income Tax rate of 27%.
• Ignore the effects of Dividends Tax and Value Added Tax (VAT).
102
ANNEXURE I: FORMATIVE ASSESSMENT 2
HFAC331-1-Jan-June2024-FA2-SK-V4-07022024
REQUIRED:
1.1 Calculate the goodwill or gain on bargain purchase, in terms of IFRS 3, that arose
on the acquisition of Gearup Ltd.
• Round off to the nearest Rand, if applicable.
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