Question 3 Caleb Carr Berhad is a maufacturing company incorporated in Malaysia since 2015 has acquired...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 3 Caleb Carr Berhad is a maufacturing company incorporated in Malaysia since 2015 has acquired 4,000,000 (80%) units of ordinary shares of Ninjitsu Sdn Bhd on 1 January 2019 with the following consideration transferred: a. Cash payment of RM2.08 million; RM1 million payable on 1 January 2019 and another RM1.08 million payable on 1 January 2020. b. Ordinary shares issued by Caleb Carr, 1 share of Caleb's for every 2 shares in Ninjitsu. c. 8% debentures issued by Caleb amounting RM1,000,000. Only the cash payment of RM 1 million has been recorded. Cost of capital is 8%. The following are statements of finanacial position for Caleb and Ninjitsu as at 31 December 2019: Caleb (RM) Ninjtsu (RM) Investment in Ninjitsu 1.000.000 Non-current assets: Land Building Plant and machinery 12.900,500 Equipment Current assets: Inventory 5,554,321 1.220,000 5.700,987 1,467,314 2.778.006 194,792 62,545,394 10,773,354 Ordinary shares 48,000,000 6.440,000 Revaluation reserve 5,400,300 665,000 Retained earnings @1 January 2019 Profit for the year Trade receivables Bank Total 22,400,000 4,500,450 8.880,700 1,900,000 790.200 3.330,880 699,998 Trade payables Total 3,099,811 1,002,300 1,144,518 889,500 4,900.765 1,776.554 62,545,394 10,773,354 Additional Information 1. The fair value of building belonging to Ninjitsu was estimated to be RM2.5million on 1 January 2019 with useful life of 20 years. One of the machinery belonging to Ninjitsu was estimated to have a fair value of RM100,000 less than its carrying value on the date of acquisition; the useful life of this machine was estimated to be 5 years. The group uses straight line depreciation method. None of these adjustments have been recorded. 2. Land belonging to Caleb and Ninjitsu are estimated to have a fair value of RM25million and RM5 million on 31 December 2019. 3. The ordinary shares prices for Caleb and Ninjitsu can be summarised as follows: 1.1.2019 31.12.2019 Caleb RM2.50/share M1.80/share Ninjitsu RM2.00/share RM1.50/share R 4. The group uses revaluation model and full goodwill to prepare its accounts. Required: (a) Record the full investment that Caleb has in Ninjitsu. Show the relevant double entries. (4 marks) (b) Show the entries required to record goodwill in the consolidated accounts. (6 marks) (c) Record the fair value adjustments for building and machinery and the relevant adjustment. depreciation (d) Prepare the consolidated statement position as at 31 December 2018. SHOW ALL RELEVANT WORKINGS. (8 marks) of financial (25 marks) Question 3 Caleb Carr Berhad is a maufacturing company incorporated in Malaysia since 2015 has acquired 4,000,000 (80%) units of ordinary shares of Ninjitsu Sdn Bhd on 1 January 2019 with the following consideration transferred: a. Cash payment of RM2.08 million; RM1 million payable on 1 January 2019 and another RM1.08 million payable on 1 January 2020. b. Ordinary shares issued by Caleb Carr, 1 share of Caleb's for every 2 shares in Ninjitsu. c. 8% debentures issued by Caleb amounting RM1,000,000. Only the cash payment of RM 1 million has been recorded. Cost of capital is 8%. The following are statements of finanacial position for Caleb and Ninjitsu as at 31 December 2019: Caleb (RM) Ninjtsu (RM) Investment in Ninjitsu 1.000.000 Non-current assets: Land Building Plant and machinery 12.900,500 Equipment Current assets: Inventory 5,554,321 1.220,000 5.700,987 1,467,314 2.778.006 194,792 62,545,394 10,773,354 Ordinary shares 48,000,000 6.440,000 Revaluation reserve 5,400,300 665,000 Retained earnings @1 January 2019 Profit for the year Trade receivables Bank Total 22,400,000 4,500,450 8.880,700 1,900,000 790.200 3.330,880 699,998 Trade payables Total 3,099,811 1,002,300 1,144,518 889,500 4,900.765 1,776.554 62,545,394 10,773,354 Additional Information 1. The fair value of building belonging to Ninjitsu was estimated to be RM2.5million on 1 January 2019 with useful life of 20 years. One of the machinery belonging to Ninjitsu was estimated to have a fair value of RM100,000 less than its carrying value on the date of acquisition; the useful life of this machine was estimated to be 5 years. The group uses straight line depreciation method. None of these adjustments have been recorded. 2. Land belonging to Caleb and Ninjitsu are estimated to have a fair value of RM25million and RM5 million on 31 December 2019. 3. The ordinary shares prices for Caleb and Ninjitsu can be summarised as follows: 1.1.2019 31.12.2019 Caleb RM2.50/share M1.80/share Ninjitsu RM2.00/share RM1.50/share R 4. The group uses revaluation model and full goodwill to prepare its accounts. Required: (a) Record the full investment that Caleb has in Ninjitsu. Show the relevant double entries. (4 marks) (b) Show the entries required to record goodwill in the consolidated accounts. (6 marks) (c) Record the fair value adjustments for building and machinery and the relevant adjustment. depreciation (d) Prepare the consolidated statement position as at 31 December 2018. SHOW ALL RELEVANT WORKINGS. (8 marks) of financial (25 marks)
Expert Answer:
Answer rating: 100% (QA)
a Record the full investment that Caleb has in Ninjitsu Show the relevant double entries Caleb Carr Berhad Dr Investment in Ninjitsu 4000000 Cr Cash 1000000 Cr Ordinary shares issued by Caleb 2000000 ... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
Posted Date:
Students also viewed these general management questions
-
The following list of balances as at 31 December 2019 has been extracted from the books of Suraya Sdn Bhd. RM Machinery at cost 35,000 Motor van at cost 12,500 Purchases of loose tools 2,000 Sales...
-
As at 31 December 2019, Portal Development Limited (PD) has trade receivables of HK$20,000,000 overdue for more than one year. After some rounds of tough negotiation with the auditor, PD finally...
-
The trial balance of Protege Enterprise as at 31 December 2019 is as follows: The trial balance of Protege Enterprise as at 31 December 2019 is as follows: Credit RM) 72.440 Debit (RM) 165.520 3,520...
-
"A 10% uniaxial tensile strain has been applied to a mouse tail tendon fascicle. Using Davis and De Vita's nonlinear viscoelastic model, plot the change in axial stress over time. Given: c1=20.3 MPa;...
-
Hydrogen sulfide, H2S, is produced during decomposition of organic matter. When 0.5500 mol H2S burns to produce SO2(g) and H2O(l), 309.1 kJ of heat is released. What is this heat in kilocalories?
-
A partner in your firm has just been offered an appointed to the board of a public listed company that is significantly owned by an overseas shareholder. She has asked you to write her some notes...
-
Explain qualitatively why sandwich structures (Figure 1.5) have such high flexural stiffness-to-weight ratios. Describe the key parameters affecting the flexural stiffness-to-weight ratio of a...
-
Consider the following January transactions for Shine King Cleaning: Jan 1 Performed cleaning services for Debbies D-list for $8,000 on terms 3/10, n/20. 3 Shine King decides to adopt the allowance...
-
if 2 ^ a = 5 and 2 ^ b = 3 , what is the value of log 3 ( 1 0 )
-
A man from Vietnam is in your office because his 11-year-old daughter has been having trouble in school. The school suggested the daughter be tested by your agency. You are doing the intake, but only...
-
Willow Products expects the following sales of its single product: Units March 5,600 April 6,500 7,650 May June 8,050. July 9,400 Willow Products desires an ending finished goods inventory to be...
-
Zelnor, Inc., is an all-equity firm with 130 million shares outstanding currently trading for $15.52 per share. Suppose Zelnor decides to grant a total of 13 million new shares to employees as part...
-
Describe the major elements in and issues with Scrum.
-
Indell stock has a current market value of $150 million and a beta of 0.70. Indell currently has risk-free debt as well. The firm decides to change its capital structure by issuing $39.34 million in...
-
What are methods and messages?
-
Investment and the interest rate The chapter argues that investment depends negatively on the interest rate because an increase in the cost of borrowing discourages investment. However, firms often...
-
Create a comparative common-size income statement for Wolf Corporation. To an investor, how does 2020 compare with 2019? Explain your reasoning B C 1123456782===== Wolf Corporation Income Statement...
-
Willingness to pay as a measure of a person's value for a particular good measures the maximum a person would be willing to pay requires that payment actually be made depends on the satisfaction that...
-
Raiders plc prepares accounts annually to 31 March. The following figures, prepared on a conventional historical cost basis, are included in the companys accounts to 31 March 20X5. 1 In the income...
-
Gettry Doffit plc is an international company with worldwide turnover of 26 million. The activities of the company include the breaking down and disposal of noxious chemicals at a specialized plant...
-
(a) A concession company, WaterAway, has completed the construction of a wastewater plant. The plant will be transferred to the public sector unconditionally after 25 years. The public sector (the...
-
Is leadership synonymous with management, or is leading just one of the many things that a manager does? In what ways are they the same or different?
-
Explain Blake and Moutons Leadership Grid in relationship to previous leadership research.
-
Write a description of an effective manager. Write words that you would use to describe an effective leader. When you review your list, consider the differences and similarities in your adjectives....
Study smarter with the SolutionInn App