Edutech Ltd is an online education institution that provides online education to tertiary learners who are pursuing undergraduate degrees, certificates, and diplomas. Edutech Ltd expanded its operations by purchasing a controlling interest in Higheredu Ltd on 1 January 2021. Higheredu Ltd is an online high school that offers schooling to learners from grades 8 to 12. Being a newly established online high school, Higheredu Ltd has incurred losses within its first two years of operating but has since started to realise profits. Edutech Ltd is of the opinion that Higheredu Ltd will continue to realise profits in the future, as online education is in great demand. Both entities have a 31 December financial year-end. You are presented with the condensed financial statements of Edutech Ltd and its subsidiary, Higheredu Ltd, for the year ended 31 December 2022: STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2022 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 Additional information: - Edutech Ltd purchased a 70% controlling interest in Higheredu Ltd on 1 January 2021. - On the acquisition date, the owner's interest in Higheredu Ltd was as follows: Share capital (200 000 ordinary shares) R200 000 Accumulated loss (R55 000) - At the acquisition date, Edutech Ltd considered the carrying amounts of the identifiable net assets of Higheredu Ltd to be equal to their fair values. - Edutech Ltd measured the non-controlling interest at its proportionate share of Higheredu Ltd's identifiable net assets. - Edutech Ltd recognised its investment in Higheredu Ltd in its separate financial statements at cost price. - The company tax rate is 28% and the Capital Gains Tax inclusion rate is 80%. Ignore Value Added Tax (VAT) and Dividend Tax. 3.1 Provide all the pro forma journal entries necessary to prepare the consolidated financial statements of the Edutech Ltd Group for the financial year ended 31 December 2022..

1. Edutech Ltd is an online education institution that provides online education to tertiary learners
who are pursuing undergraduate degrees, certificates, and diplomas. Edutech Ltd expanded its
operations by purchasing a controlling interest in Higheredu Ltd on 1 January 2021. Higheredu
Ltd is an online high school that offers schooling to learners from grades 8 to 12. Being a newly
established online high school, Higheredu Ltd has incurred losses within its first two years of
operating but has since started to realise profits. Edutech Ltd is of the opinion that Higheredu Ltd
will continue to realise profits in the future, as online education is in great demand. Both entities
have a 31 December financial year-end. You are presented with the condensed financial
statements of Edutech Ltd and its subsidiary, Higheredu Ltd, for the year ended 31 December
2022: STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER
2022
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 Additional
information: - Edutech Ltd purchased a 70% controlling interest in Higheredu Ltd on 1 January
2021. - On the acquisition date, the owner's interest in Higheredu Ltd was as follows: Share
capital (200 000 ordinary shares) R200 000 Accumulated loss (R55 000) - At the acquisition
date, Edutech Ltd considered the carrying amounts of the identifiable net assets of Higheredu Ltd
to be equal to their fair values. - Edutech Ltd measured the non-controlling interest at its
proportionate share of Higheredu Ltd's identifiable net assets. - Edutech Ltd recognised its
investment in Higheredu Ltd in its separate financial statements at cost price. - The company tax
rate is 28% and the Capital Gains Tax inclusion rate is 80%. Ignore Value Added Tax (VAT) and
Dividend Tax.
3.1 Provide all the pro forma journal entries necessary to prepare the consolidated financial
statements of the Edutech Ltd Group for the financial year ended 31 December 2022.