Additional Information

1. From the available records of the companies, you extracted the following fair value adjustments which have not been adjusted in the books. The group uses revaluation model to prepare its accounts:

As at 1 January 2018	Horus (RM)	Sunbeam (RM)		Soleil (RM)		Athena (RM)
Plant Useful life	200,000 8 years
Machinery Useful life	100,000 5 years
Land	500,000	300,000
As at 31 Dec 2019 Land	400,000	150,000
			For year ended 2018, Sunbeam sold equipment to Horus with the profit of RM50,000. Useful life of this asset is estimated to be 5 years. Full year depreciation is charged in the year of acquisition and none in the year of disposal. During the year, Soleil sold inventories with the invoice value of RM800,000 to Horus at cost plus 25%. 20% of the ending inventory in Horus were inventories purchased from Soleil. Soleil also sold inventories to Sunbeam at the invoice price of RM4,712,000 at cost plus 25%. 80% of these inventories have been sold off to third parties. Sunbeam has paid for 50% of the invoice balance but the payment was only received after 31 December 2019. For year ended 2019, Athena sold inventories to Horus at cost plus 25%, the invoice value was RM100,000 and 50% of these inventories have been sold off. Soleil has not accrued its loan interest expense for the full year and Sunbeam has not recognised the interest income in its books. The group uses straight line depreciation and partial goodwill to prepare its accounts. Difference in current account is due to inventory in transit. All depreciation expenses and goodwill impairment are to be adjusted in administration expenses. Required: Determine the goodwill for all the investments. Prepare the Group Statement of Financial Position as at 31 December 2019. Prepare the Group Statement of Comprehensive Income for year ended 31 December 2019. Prepare the Group Statement Changes in Equity for year ended 31 December 2019.

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You have been recently promoted to be the group accountant for Horus Berhad and the following information were found in the minutes of meeting: 1. Horus Berhad acquired 70% of the ordinary shares of Sunbeam on 1 January 2018 with consideration transferred of RM21 million. On the same date, Horus also acquired 40% of the preference shares issued by Sunbeam by cash consideration of RM200,000. 2. Upon checking the previous year's statements, the retained earnings of Sunbeam as at 1 January 2018 was RM634,000. There are no issuance of new shares since acquisition date. 3. Sunbeam's partial goodwill has been impaired by RM462,000 for the year 2019. There was no impairment recorded in the previous year. On 1 January 2019, Horus acquired 80% of the ordinary shares of Soleil Sdn Bhd with the following consideration: Cash payment on 1 January 2019 Horus ordinary shares valued at RM2 million RM5 million Additional cash payment payable on 1 January 2020 RM3.3 million Cost of capital is given as 10% per annum. Horus also acquired 50% of the preference shares issued by Soleil on 1 January 2019 In 1 April 2019, Horus acquired 20% of Athena Sdn Bhd ordinary shares with cash payment of RM1.5 million. There are no issuance of new shares for all the companies since 1 January 2018. The following financial statements were extracted from the company's records: Statements of Financial Position as at 31 December 2019: Statements of Comprehensive Income for year ended 31 December 2019 Turnover -) Cost of sales Gross margin -) Administration expenses -) Selling expenses +) Gain from sale of plant Profit before taxation -) Taxation Profit aftertax RE b/f Dividends declared in December 2019: Ordinary shares 5% Preference shares 6% Preference shares 8% Preference shares 7% Debentures Horus Sunbeam Soleil Athena RM'000 RM'000 RM'000 RM'000 15,900 9,873 (7,880) (4,621) 8,020 5,252 (3,564) (1,781) (1,996) (964) 2% Full year 50 3% Half year 7,336 5,880 - Full year Full year (3,316) (3,120) 4,020 2,760 (1,153) (736) 1,783 2,460 2,557 2,082 (620) (590) (475) (340) 1,840 1,967 1,607 6,825 1,732 428 (849) 1,443 (785) - (241) Full year Investment: Ordinary shares of Sunbeam Preference shares of Sunbeam Non-current assets: Land Building Plant Machinery Equipment Current assets: 10% Loan to Soleil Inventory Current account Trade receivables Bank Total assets Ordinary shares 5% Preference shares 6% Preference shares 8% Preference shares Revaluation reserve Retained earnings 7% Debentures 10% Loan from Sunbeam Current account Trade payables Other payables Total equities and liabilities Horus Sunbeam Soleil Athena RM'000 RM'000 RM'000 RM'000 21,000 200 25,916 11,207 6,463 3,887 15,400 9,009 3,224 2,114 2,700 1,860 1,863 866 3,100 2,136 872 1,950 1,269 654 250 2,356 3,010 780 3,650 4,210 81,916 31,444 5,000 8,665 800 2,669 688 58,850 20,000 3,000 500 3,000 3,699 200 575 2,806 4,235 1,366 664 988 841 1,335 1,154 711 - 16,579 10,217 - 853 10,000 8,000 - - 871 100 250 195 1,896 103 300 1,800 600 2,035 594 - 897 126 81,916 31,444 16,579 10,217 You have been recently promoted to be the group accountant for Horus Berhad and the following information were found in the minutes of meeting: 1. Horus Berhad acquired 70% of the ordinary shares of Sunbeam on 1 January 2018 with consideration transferred of RM21 million. On the same date, Horus also acquired 40% of the preference shares issued by Sunbeam by cash consideration of RM200,000. 2. Upon checking the previous year's statements, the retained earnings of Sunbeam as at 1 January 2018 was RM634,000. There are no issuance of new shares since acquisition date. 3. Sunbeam's partial goodwill has been impaired by RM462,000 for the year 2019. There was no impairment recorded in the previous year. On 1 January 2019, Horus acquired 80% of the ordinary shares of Soleil Sdn Bhd with the following consideration: Cash payment on 1 January 2019 Horus ordinary shares valued at RM2 million RM5 million Additional cash payment payable on 1 January 2020 RM3.3 million Cost of capital is given as 10% per annum. Horus also acquired 50% of the preference shares issued by Soleil on 1 January 2019 In 1 April 2019, Horus acquired 20% of Athena Sdn Bhd ordinary shares with cash payment of RM1.5 million. There are no issuance of new shares for all the companies since 1 January 2018. The following financial statements were extracted from the company's records: Statements of Financial Position as at 31 December 2019: Statements of Comprehensive Income for year ended 31 December 2019 Turnover -) Cost of sales Gross margin -) Administration expenses -) Selling expenses +) Gain from sale of plant Profit before taxation -) Taxation Profit aftertax RE b/f Dividends declared in December 2019: Ordinary shares 5% Preference shares 6% Preference shares 8% Preference shares 7% Debentures Horus Sunbeam Soleil Athena RM'000 RM'000 RM'000 RM'000 15,900 9,873 (7,880) (4,621) 8,020 5,252 (3,564) (1,781) (1,996) (964) 2% Full year 50 3% Half year 7,336 5,880 - Full year Full year (3,316) (3,120) 4,020 2,760 (1,153) (736) 1,783 2,460 2,557 2,082 (620) (590) (475) (340) 1,840 1,967 1,607 6,825 1,732 428 (849) 1,443 (785) - (241) Full year Investment: Ordinary shares of Sunbeam Preference shares of Sunbeam Non-current assets: Land Building Plant Machinery Equipment Current assets: 10% Loan to Soleil Inventory Current account Trade receivables Bank Total assets Ordinary shares 5% Preference shares 6% Preference shares 8% Preference shares Revaluation reserve Retained earnings 7% Debentures 10% Loan from Sunbeam Current account Trade payables Other payables Total equities and liabilities Horus Sunbeam Soleil Athena RM'000 RM'000 RM'000 RM'000 21,000 200 25,916 11,207 6,463 3,887 15,400 9,009 3,224 2,114 2,700 1,860 1,863 866 3,100 2,136 872 1,950 1,269 654 250 2,356 3,010 780 3,650 4,210 81,916 31,444 5,000 8,665 800 2,669 688 58,850 20,000 3,000 500 3,000 3,699 200 575 2,806 4,235 1,366 664 988 841 1,335 1,154 711 - 16,579 10,217 - 853 10,000 8,000 - - 871 100 250 195 1,896 103 300 1,800 600 2,035 594 - 897 126 81,916 31,444 16,579 10,217

Answer rating: 100% (QA)

Based on the information provided here are some calculations and financial ratios Calculate the goodwill recognized by Horus Berhad for its acquisitio... View the full answer