On the 1/01/x3, J Group acquired 2 025 000 of the 4 500 000 ordinary R1 shares in Entity PA for R5 695000. At acquisition, PA had retained earnings of R1 400 000. When preparing the J Group's consolidatedfinancial statements for the year end date of 31/12/x3, accountants at the group entity are working with thefollowing information: In the x3 financial year, Entity PA made a profit after tax of R 1 230 000; In the x3financial year, PA paid a dividend totaling R45 000 to its shareholders; At the end of the x3 financial year,the group's investment in PA is found to have impaired by R94 000. Based on this information, calculatethe group's investment in associate figure, in its consolidated financial statements dated 31/12/x3.

The objective of the question is to calculate the group's investment in associate figure in its…

Answered: On the 1/01/x3, J Group acquired 2 025…

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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On the 1/01/x3, J Group acquired 2 025 000 of the 4 500 000 ordinary R1 shares in Entity PA for R5 695 000. At acquisition, PA had retained earnings of R1 400 000. When preparing the J Group's consolidated financial statements for the year end date of 31/12/x3, accountants at the group entity are working with the following information: In the x3 financial year, Entity PA made a profit after tax of R 1 230 000; In the x3 financial year, PA paid a dividend totaling R45 000 to its shareholders; At the end of the x3 financial year, the group's investment in PA is found to have impaired by R94 000. Based on this information, calculate the group's investment in associate figure, in its consolidated financial statements dated 31/12/x3.

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