The financial statements are given for the Marie group for the year ended 31 December 2023...
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The financial statements are given for the Marie group for the year ended 31 December 2023 as below: Statement of Comprehensive Income Marie Bhd (RM'000) Donny Bhd (RM'000) Setia Bhd (RM'000) Revenue 712,000 325,000 169,000 Cost of Sales (538,000) (137,000) (75,000) Gross Profit 174,000 188,000 94,000 Other operating expenses (77,000) (102,000) (16,000) Profit from operations 97,000 86,000 78,000 Investment income 16,000 5,000 Finance costs (5,000) (3,200) (1,200) Profit before taxation 108,000 82,800 81,800 Taxation (21,600) (16,560) (1,636) Profit for the year 86,400 66,240 80,164 (i) Marie Bhd owns all the shares in Donny Bhd and 40% of the shares in Setia Bhd. Marie Bhd has provided each company with a loan of RM10 million at an interest rate of 10%. Both loans have been outstanding throughout the period. (ii) When Marie Bhd acquired Donny Bhd 3 years ago, the fair value of its net assets were RM1,000,000 higher than its carrying value. This related to a plant which had an estimated future useful life of 5 years at the date of acquisition. (!!!) Marie Bhd supplies a component which is used as a raw material by Donny Bhd and Setia Bhd. During the year ended 31 December 2023, sales of such components by Marie Bhd to Donny Bhd were RM800,000 and by Marie Bhd to Setia Bhd was RM600,000. Donny Berhad had sold half of the inventories by end of the year. Setia Bhd held no inventory purchased from Marie Bhd at the year end. Marie Bhd marks up all sales to Donny Bhd and Setia Bhd by 25%. (iv) During the year there was no impairment of goodwill or intra-group dividends paid. Required: Prepare a. the elimination entries for the intra-group transactions. b. the consolidated statement of comprehensive income. The financial statements are given for the Marie group for the year ended 31 December 2023 as below: Statement of Comprehensive Income Marie Bhd (RM'000) Donny Bhd (RM'000) Setia Bhd (RM'000) Revenue 712,000 325,000 169,000 Cost of Sales (538,000) (137,000) (75,000) Gross Profit 174,000 188,000 94,000 Other operating expenses (77,000) (102,000) (16,000) Profit from operations 97,000 86,000 78,000 Investment income 16,000 5,000 Finance costs (5,000) (3,200) (1,200) Profit before taxation 108,000 82,800 81,800 Taxation (21,600) (16,560) (1,636) Profit for the year 86,400 66,240 80,164 (i) Marie Bhd owns all the shares in Donny Bhd and 40% of the shares in Setia Bhd. Marie Bhd has provided each company with a loan of RM10 million at an interest rate of 10%. Both loans have been outstanding throughout the period. (ii) When Marie Bhd acquired Donny Bhd 3 years ago, the fair value of its net assets were RM1,000,000 higher than its carrying value. This related to a plant which had an estimated future useful life of 5 years at the date of acquisition. (!!!) Marie Bhd supplies a component which is used as a raw material by Donny Bhd and Setia Bhd. During the year ended 31 December 2023, sales of such components by Marie Bhd to Donny Bhd were RM800,000 and by Marie Bhd to Setia Bhd was RM600,000. Donny Berhad had sold half of the inventories by end of the year. Setia Bhd held no inventory purchased from Marie Bhd at the year end. Marie Bhd marks up all sales to Donny Bhd and Setia Bhd by 25%. (iv) During the year there was no impairment of goodwill or intra-group dividends paid. Required: Prepare a. the elimination entries for the intra-group transactions. b. the consolidated statement of comprehensive income.
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a Elimination Entries for IntraGroup Transactions 1 Elimination of Intercompany Sales Marie Bhd Seller needs to eliminate the revenue and cost of sale... View the full answer
Related Book For
International Financial Reporting and Analysis
ISBN: 978-1408075012
5th edition
Authors: David Alexander, Anne Britton, Ann Jorissen
Posted Date:
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