Question 1 Double Tree Bhd (DTB) is a manufacturing company. DTB owns the following investments in...
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Question 1 Double Tree Bhd (DTB) is a manufacturing company. DTB owns the following investments in other companies: Name of company Equity Shares Non-equity shares held Nature of business Hotel A Sdn Bhd (ASB) B Sdn Bhd (BSB) C Sdn Bhd (CSB) 70% 25% Nil Manufacturing Transportation 80% 48% 25% It is the company's policy that majority voting rights will provide investor with the current ability to direct the relevant activities, which often will be through determining operating and financing policies. DTB also has appointed five of the seven directors of C Sdn Bhd. During the current year DTB intended to acquired 80% of Fuji Sdn Bhd (FSB)'s 40,000 ordinary share capital for a consideration of RM3.50 cash per share. The fair value of the non-controlling interest was RM50,000 and the fair value of the net assets acquired was RM145,000. To fund the acquisition, the directors are aware of different methods to raise capital. (d) DTB had successfully acquired FSB on 1.1.2021. What should be recorded as goodwill on acquisition of FSB in the consolidated financial statements? Please show your calculation. [5 marks] Question 1 Double Tree Bhd (DTB) is a manufacturing company. DTB owns the following investments in other companies: Name of company Equity Shares Non-equity shares held Nature of business Hotel A Sdn Bhd (ASB) B Sdn Bhd (BSB) C Sdn Bhd (CSB) 70% 25% Nil Manufacturing Transportation 80% 48% 25% It is the company's policy that majority voting rights will provide investor with the current ability to direct the relevant activities, which often will be through determining operating and financing policies. DTB also has appointed five of the seven directors of C Sdn Bhd. During the current year DTB intended to acquired 80% of Fuji Sdn Bhd (FSB)'s 40,000 ordinary share capital for a consideration of RM3.50 cash per share. The fair value of the non-controlling interest was RM50,000 and the fair value of the net assets acquired was RM145,000. To fund the acquisition, the directors are aware of different methods to raise capital. (d) DTB had successfully acquired FSB on 1.1.2021. What should be recorded as goodwill on acquisition of FSB in the consolidated financial statements? Please show your calculation. [5 marks]
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Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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