On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited. The terms of the purchase agreement include, among other things, the following: • Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100 000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price of the10% preference shares on 30 September 2015 was R2.50 each. e oft • Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after the year end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitied to vote at the company's AGM but preference shares are not entitled to vote. What is the value of the purchase consideration? Select one: O a. R200 000 O b. R300 000 O G R250 000 O d. R450 000

On 1 July 2015, Monageng Limited concluded an agreement to purchase 75% of the ordinary shares in Selongo Limited. The terms of the purchase agreement include, among other things, the following: • Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100 000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price of the10% preference shares on 30 September 2015 was R2.50 each. e oft • Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after the year end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitied to vote at the company's AGM but preference shares are not entitled to vote. What is the value of the purchase consideration? Select one: O a. R200 000 O b. R300 000 O G R250 000 O d. R450 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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• Monageng Limited will settle for the 75% of the ordinary shares by paying cash of R200 000 in addition to issuing 100000 of its own 10% preference shares to the owners of the 75% ordinary shares on 30 September 2015. The price ofthe10% preference shares on 30 September 2015 was R2.50 each.• Monageng Limited will only be able to appoint its directors to the board of Selongo Limited on 1 August 2015 after theyear end date of Selongo Limited which is on 31 July 2015. All the ordinary shares of Selongo Limited are entitled to voteat the company’s AGM but preference shares are not entitled to vote.Which of the following statements are true?(i) Monageng Limited is the acquiree(ii) Selongo Limited is the acquiree(iii) Monageng Limited is the acquirer(iv) Selongo Limited is the acquirerSelect one:a.(i) and (iv) onlyb.(i), (ii) and (iii) onlyc.(ii) and (iii) onlyd.(iii) and (iv) only
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