The following information is also available: ? ? ? ? ? ? ? ? ? ? ?
Question:
The following information is also available: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
i) ? ? ? High Bhd acquired 80% of the ordinary shares in Middle Bhd on 1 January 2018 for RM530,000,000 when the accumulated profits of Middle Bhd was RM75,000. There have been no changes in Middle Bhd's ordinary shares since then. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
ii) ? ? At the date of acquisition, Middle's office equipment had a fair value of RM30,000 higher than their book value. This revaluation has not been reflected in the books of Middle. At the date of acquisition, office equipment had an estimated life of 10 years. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
iii) ? ?High Bhd acquired 30% of the ordinary shares in Low Bhd on 1 January 2019 for RM150,000 when the retained profits of Low Bhd was RM90,000. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
iv) ? ?During 2019, Middle Bhd sold inventories to High Bhd at invoice value of RM100,000. The markup was 25% and 50% of these goods were still in the inventory of High Bhd at 31st December 2019. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
v) ? ? ?On 1st December 2019, Low Bhd sold inventories to High Bhd at invoice value of RM50,000. The margin was 10% and 100% of these goods were still in the inventory of High Bhd at 31st December 2019. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
vi) ? ?On 28 December 2019 Middle Bhd sent a cheque for RM40,000 to High Bhd. The cheque was recorded in the books of High Bhd on 2nd January 2020. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
vii) ?The goodwill arising on consolidation on Middle Bhd had been impaired by RM5,000 up to 31 December 2018, with a further impairment of RM10,000 in the current year ended 31 December 2019. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
viii) On 31 December 2019, the directors of High Bhd proposed a dividend of 20 cents per shares. Middle Bhd and Low Bhd had paid a dividend of 5 cents per share on 3 December 2019. ? ? ? ? ?
ix) ? ?It is group policy to value the non-controlling interest using the proportion of net assets method.
x) ? ? ?All revenues and expenses are expected to accrue evenly throughout the year. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
Required: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
a) Prepare a consolidated statement of comprehensive income for High Bhd and its group of companies for the year to 31 December 2019. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
b) Prepare consolidated statement of financial position for High Bhd and its group of companies as of 31 December 2019. ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott