Fantastic Group Berhad bought 70% shares in its subsidiary many years ago. The consolidated financial statements...

 

  

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Fantastic Group Berhad bought 70% shares in its subsidiary many years ago. The consolidated financial statements were presented below: Fantastic Group Berhad Consolidated Statement of Profit or Loss and Movement in Retained Earnings for the year ended 31 December 2020 Sales Cost of goods sold Gross profit Interest incomes Operating expenses Operating profit Dividend incomes Interest expenses Net profit before taxation Tax expenses Net profit for the year Net profit attributable to: Non-controlling interest Owners of the parent company Movements in Group's Retained Profits: Retained profits b'f Net profits Available for appropriation Dividends paid Retained profits c/f RM000 28,400 (8,520) 19,880 220 (4.000) 16,100 900 (730) 16,270 (3,200) 13,070 3,921 9,149 13,070 8,400 9,149 17.549 (2.700) 14,849 Non-current assets Property, plant and equipment Investment in associate company Investment in shares Current assets Inventories Trade receivables Fixed deposits and short-term deposits Cash in hand and at bank Total assets Financed by Ordinary share capital Retained profits Fantastic Group Berhad Consolidated Statement of Financial Position as at 31 December NCI's equity Non-current liabilities 8% convertible debentures maturing in 2030 Current liabilities Track payables Bank overdraft 2 3 4 5 6 7 8 2020 RM1000 17,340 1,600 3,000 7,500 7,000 5,500 2,000 22,000 43,940 8,000 14,849 22,849 6,291 6,000 5,300 3,500 8,800 43,940 2019 RM000 7,920 5,000 3,500 2.300 1,600 12,400 25.320 Total equity and liabilities Additional information: Interest expenses consist of debenture interest RM430,000 and the balance for bank overdraft interest. 7,000 8,400 15,400 2.520 4,600 2,800 7.400 25.320 The annual depreciation for the group was RM1.370,000 and this amorast was included in the operating expenses. Fixed deposits were regarded as cash and cash equivalent by the group, and the interests received were added onto the principal amounts Dividend received from subsidiary was RM500,000 and this included the amounts for the shareholders of parent company and the minority shareholders. Income tax for current year had been paid. Dividend incomes were from the investment in shares listed on Bursa Malaysia, The 8% convertible debenture was issued on 1 January 2020 to finance the expansion of the business. Every 1,000 debentare shares can be converted into 500 ordinary shares. The ordinary shares were issued and paid-up at RMI per share. Required: Determine the cash inflows or cash outflows of appropriate accounts for the relevant adjustments. (9.5 marks) (b) Present the Consolidated Statement of Cash Flow for the year-ended 31 December 2020 using the indirect method. (11 marks) Compute the following cash flow ratios of the company and comment on the results: Operating cash flow/current maturities of debentures and loans Operating cash flows (i) Operating cash flow/total deht (1) Operating cash flow per share (c) (1) Debentures +Loans + Accounts Payables Operating cash flows Total debts Operating cash flows Total number of shares (4.5 marks) Fantastic Group Berhad bought 70% shares in its subsidiary many years ago. The consolidated financial statements were presented below: Fantastic Group Berhad Consolidated Statement of Profit or Loss and Movement in Retained Earnings for the year ended 31 December 2020 Sales Cost of goods sold Gross profit Interest incomes Operating expenses Operating profit Dividend incomes Interest expenses Net profit before taxation Tax expenses Net profit for the year Net profit attributable to: Non-controlling interest Owners of the parent company Movements in Group's Retained Profits: Retained profits b'f Net profits Available for appropriation Dividends paid Retained profits c/f RM000 28,400 (8,520) 19,880 220 (4.000) 16,100 900 (730) 16,270 (3,200) 13,070 3,921 9,149 13,070 8,400 9,149 17.549 (2.700) 14,849 Non-current assets Property, plant and equipment Investment in associate company Investment in shares Current assets Inventories Trade receivables Fixed deposits and short-term deposits Cash in hand and at bank Total assets Financed by Ordinary share capital Retained profits Fantastic Group Berhad Consolidated Statement of Financial Position as at 31 December NCI's equity Non-current liabilities 8% convertible debentures maturing in 2030 Current liabilities Track payables Bank overdraft 2 3 4 5 6 7 8 2020 RM1000 17,340 1,600 3,000 7,500 7,000 5,500 2,000 22,000 43,940 8,000 14,849 22,849 6,291 6,000 5,300 3,500 8,800 43,940 2019 RM000 7,920 5,000 3,500 2.300 1,600 12,400 25.320 Total equity and liabilities Additional information: Interest expenses consist of debenture interest RM430,000 and the balance for bank overdraft interest. 7,000 8,400 15,400 2.520 4,600 2,800 7.400 25.320 The annual depreciation for the group was RM1.370,000 and this amorast was included in the operating expenses. Fixed deposits were regarded as cash and cash equivalent by the group, and the interests received were added onto the principal amounts Dividend received from subsidiary was RM500,000 and this included the amounts for the shareholders of parent company and the minority shareholders. Income tax for current year had been paid. Dividend incomes were from the investment in shares listed on Bursa Malaysia, The 8% convertible debenture was issued on 1 January 2020 to finance the expansion of the business. Every 1,000 debentare shares can be converted into 500 ordinary shares. The ordinary shares were issued and paid-up at RMI per share. Required: Determine the cash inflows or cash outflows of appropriate accounts for the relevant adjustments. (9.5 marks) (b) Present the Consolidated Statement of Cash Flow for the year-ended 31 December 2020 using the indirect method. (11 marks) Compute the following cash flow ratios of the company and comment on the results: Operating cash flow/current maturities of debentures and loans Operating cash flows (i) Operating cash flow/total deht (1) Operating cash flow per share (c) (1) Debentures +Loans + Accounts Payables Operating cash flows Total debts Operating cash flows Total number of shares (4.5 marks)

Answer rating: 100% (QA)

a Cash inflows or cash outflows of appropriate accounts for the relevant adjustments Interest expenses The debenture interest of RM430000 is a cash ou... View the full answer