Part B The following information relates to three companies as at 31 December 2021. Non-current assets...
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Part B The following information relates to three companies as at 31 December 2021. Non-current assets Freehold land and building Property, plant and equipment Investment in ordinary shares: Ely Em Current assets Inventories Account receivables Cash and bank Equity and liabilities Ordinary share capital 10% Preference shares Retained earnings Trade payables Additional information: a. The issued share capital comprises: Ordinary shares (in '000 units) 10% preference share (in '000 units) Kay RM'000 875 70 250 55 12.5 15 80 1,357.5 1,175 100 34 48.5 1,357.5 Kay 650 50 Ely RM'000 Ely 200 20 160 105 35 15 15 330 225 25 35 45 330 Em RM'000 Em 150 115 42.5 15 12 10 194.5 150 30 14.5 194.5 Continued... b. Kay acquired 160,000 ordinary shares of Ely on 1st January 2019. On that date, the retained earnings of Ely is RM55,000. Ely recognised non-controlling interest at fair value of RM80,000. c. Kay has one-third interest in Em beginning from 1st January 2020 when the retained earnings of Em was RM22,500. Kay has joint control in Em due to the joint venture. d. In year 2020, Kay sold a machine with a carrying value of RM5,000 for RM7,500 to Ely. The depreciation is charged at 20% on cost, giving full year's charge in the year of purchase. e. Goodwill on consolidation for Ely was impaired by RM5,000. The impairment loss on the investment in Em is RM3,500. f. Included in the receivables of Kay were RM1,000 due from Ely. Ely had remitted RM500 on account of these debts but Kay did not adjust its bank account. There is also RM1,500 due from Em. g. During the current year, Kay sold inventories to both Ely and Em at cost plus 10% of RM5,500 and RM1,650 invoices price, respectively. Both Ely and Em have not sold any of these goods. Required: i. Compute the goodwill for each acquisition. (5 marks) ii. Prepare the consolidated statement of financial position of the group as at 31 December 2021. Show all relevant workings. (15 marks) (Total: 25 marks) Part B The following information relates to three companies as at 31 December 2021. Non-current assets Freehold land and building Property, plant and equipment Investment in ordinary shares: Ely Em Current assets Inventories Account receivables Cash and bank Equity and liabilities Ordinary share capital 10% Preference shares Retained earnings Trade payables Additional information: a. The issued share capital comprises: Ordinary shares (in '000 units) 10% preference share (in '000 units) Kay RM'000 875 70 250 55 12.5 15 80 1,357.5 1,175 100 34 48.5 1,357.5 Kay 650 50 Ely RM'000 Ely 200 20 160 105 35 15 15 330 225 25 35 45 330 Em RM'000 Em 150 115 42.5 15 12 10 194.5 150 30 14.5 194.5 Continued... b. Kay acquired 160,000 ordinary shares of Ely on 1st January 2019. On that date, the retained earnings of Ely is RM55,000. Ely recognised non-controlling interest at fair value of RM80,000. c. Kay has one-third interest in Em beginning from 1st January 2020 when the retained earnings of Em was RM22,500. Kay has joint control in Em due to the joint venture. d. In year 2020, Kay sold a machine with a carrying value of RM5,000 for RM7,500 to Ely. The depreciation is charged at 20% on cost, giving full year's charge in the year of purchase. e. Goodwill on consolidation for Ely was impaired by RM5,000. The impairment loss on the investment in Em is RM3,500. f. Included in the receivables of Kay were RM1,000 due from Ely. Ely had remitted RM500 on account of these debts but Kay did not adjust its bank account. There is also RM1,500 due from Em. g. During the current year, Kay sold inventories to both Ely and Em at cost plus 10% of RM5,500 and RM1,650 invoices price, respectively. Both Ely and Em have not sold any of these goods. Required: i. Compute the goodwill for each acquisition. (5 marks) ii. Prepare the consolidated statement of financial position of the group as at 31 December 2021. Show all relevant workings. (15 marks) (Total: 25 marks)
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i Kays goodwill for acquisition of Ely RM55000 RM80000 RM1175000 RM... View the full answer
Related Book For
Fundamental Accounting Principles Volume II
ISBN: 978-1259066511
14th Canadian Edition
Authors: Larson Kermit, Jensen Tilly
Posted Date:
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