Adam Bhd, a public listed company on Bursa Malaysia since the year 2005 had acquired Bubble Bhd
Question:
Adam Bhd, a public listed company on Bursa Malaysia since the year 2005 had acquired Bubble Bhd and Crypto Bhd. The following are the financial statements of the companies for the year ended 31 December 2020:
Additional information:
1. Adam Bhd bought 240 million ordinary shares of Bubble Bhd on 1 January 2017 by paying cash of RM500 million. On that date, the share premium and retained profits of Bubble Bhd amounted to RM20 million and RM40 million respectively. As at the acquisition date, a non-depreciable asset of Bubble Bhd had a fair value of RM15 million than its carrying amount. Bubble Bhd did not adjust its record to account for the increase in value.
2. A year after, on 1 January 2018, Adam Bhd acquired 40% ordinary shares of Crypto Bhd when the retained profits of Crypto Bhd was RM 30 million. The consideration was paid by cash of RM208 million. There has been no new issue of shares of Crypto Bhd since the date of acquisition.
3. During the year ended 2020, Adam Bhd purchased inventories from Bubble Bhd at a selling price of RM75 million with a 20% margin. The purchase was on a credit basis and no payment has been made until 31 December 2020. 40% of these inventories remain unsold at the end of the year.
4. Adam Bhd disposed of a machine to Bubble Bhd on September 2020 at RM100,000 above its carrying amount. The remaining useful life of this machine was ten years.
5. Group policies:
i. 10% for the impairment of the goodwill on consolidation, and
ii. Non-controlling interest is to be valued at its proportionate share of the fair value of the identifiable net assets of the subsidiaries on the date of acquisition.
Required: Prepare the Consolidated Statement of Financial Position of Adam Bhd Group as of 31 December 2020. Disclose all workings.
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones