a. Calculate the goodwill or bargain purchase arising from the acquisition of Corin Bhd by Belcon Bhd.
b. Record the journal entries to recognise goodwill or bargain purchase on consolidation (where applicable) for the acquisition of ordinary shares in Corin Bhd by Belcon Bhd on the date of acquisition.
c. Prepare the Consolidated Statement of Financial Position of Belcon Bhd’s group as at 31 December 2020. Show all workings.
    

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QUESTION 1 The following are the Statement of Financial Position of Belcon Bhd and Corin Bhd as at 31 December 2020. Non-current assets Land Plant & Machinery (carrying value) Investment property (carrying value) Motor Vehicles (carrying value) Investment in Corin Bhd: 750,000 units of Ordinary shares 75,000 units of Preference shares 40,000 8% debentures Current assets Inventories Account Receivables Bills Receivable Ordinary Dividend Receivable Loan to - Corin Bhd Bank Equity Ordinary share capital 6% Preference shares Retained profit General reserve Non-current liabilities 8% Debentures Current liabilities Account payables Bills payable Preference dividend payable Ordinary dividend payable Loan from Belcon Bhd Belcon Bhd RM 500,000 570,000 420,000 600,000 1,125,000 75,000 40,000 225,000 135,000 114,000 60,000 45,000 321,000 4,230,000 1,650,000 750,000 510,000 244,500 417,000 249,000 244,500 45,000 120,000 4,230,000 Corin Bhd RM 228,000 436,500 117,000 450,000 197,250 141,000 241,500 296,250 2,107,500 937,500 150,000 240,000 75,000 120,000 396,000 67,500 9,000 75,000 37,500 2,107,500 QUESTION 1 The following are the Statement of Financial Position of Belcon Bhd and Corin Bhd as at 31 December 2020. Non-current assets Land Plant & Machinery (carrying value) Investment property (carrying value) Motor Vehicles (carrying value) Investment in Corin Bhd: 750,000 units of Ordinary shares 75,000 units of Preference shares 40,000 8% debentures Current assets Inventories Account Receivables Bills Receivable Ordinary Dividend Receivable Loan to - Corin Bhd Bank Equity Ordinary share capital 6% Preference shares Retained profit General reserve Non-current liabilities 8% Debentures Current liabilities Account payables Bills payable Preference dividend payable Ordinary dividend payable Loan from Belcon Bhd Belcon Bhd RM 500,000 570,000 420,000 600,000 1,125,000 75,000 40,000 225,000 135,000 114,000 60,000 45,000 321,000 4,230,000 1,650,000 750,000 510,000 244,500 417,000 249,000 244,500 45,000 120,000 4,230,000 Corin Bhd RM 228,000 436,500 117,000 450,000 197,250 141,000 241,500 296,250 2,107,500 937,500 150,000 240,000 75,000 120,000 396,000 67,500 9,000 75,000 37,500 2,107,500

Answer rating: 100% (QA)

a Calculate the goodwill or bargain purchase To calculate goodwill or bargain purchase we need to determine the fair value of Corin Bhds identifiable ... View the full answer