IT Sayang Bhd is a public listed company dealing with household utensil and equipment. The followings...

   

Transcribed Image Text:

IT Sayang Bhd is a public listed company dealing with household utensil and equipment. The followings are the Statement of Financial Position of Sayang Bhd. Bayang Bhd and Dayang Bhd as at 31 December, 2021. Non-Current Assets Property, plant & Equipment Investment in Bayang Bhd Investment In Dayang Bhd Intellectual property Other investments Current Assets Inventories Trade receivables Cash & Cash Equivalents Total Assets Equity Ordinary Shares Retained profits Other reserves Total Equity Non-Current Liabilities Long term borrowings Deferred Tax Total Non-Current Liabilities Current Liabilities Trade Payables Tax payables Total Current Liabilities Total Equity & Liabilities Sayang Bhd Bayang Bhd RM'000 RM'000 165,000 57,500 2,500 5.000 230.000 62,500 27,500 95.000 185.000 415.000 210,000 85,000 25.000 320.000 30,000 20.000 50.000 32,500 12.500 45.000 415,000 25,000 60,000 1.500 86.500 30,000 14,000 17,500 61.500 148,000 50,000 39,500 12,500 102.000 15,000 12.500 27.500 12,500 6.000 18,500 148.000 Dayang Bhd RM'000 50,000 50.000 24,250 9,750 19,250 53.250 103,250 50,000 22,500 7.500 80.000 5,000 5.000 10.000 10,000 3.250 13,250 103,250 Additional information: i. ii. The number of ordinary shares of the three companies are as follows: Sayang Bhd Bayang Bhd Dayang Bhd 150,000,000 units 50,000,000 units 50,000,000 units Sayang Bhd acquired 80% of the equity shares of Bayang Bhd on 1 January 2021for RM57,500,000 when the retained profits and other reserves of Bayang Bhd stood at RM5,000,000 and RM2,500,000 respectively. At the date of acquisition, the fair value of the net assets was RM70,000,000. The excess of the fair value over the net assets is due to an increase in the value of freehold land of the company. The fair value of one ordinary share of Bayang Bhd on 1 January 2021 and 31 December 2021 were RM1.50 and RM2.50 respectively. On 1 January 2021, Bayang Bhd acquired 90% Dayang. Bhd when the retained profits and other reserves of Dayang. Bhd stood at RM10,000,000 and RM2,500,000 respectively. The values of Dayang Bhd's share at the date of acquisition was at RM1.32 per unit. iv. V. During the year 2021, Dayang. Bhd sold goods to Sayang Bhd for RM7,500,000 in the post-acquisition period at cost plus 20%. Half of the goods still remained unsold as at year end. The intellectual property is a software package designed for specific use in Sayang Bhd's accounting system. The company has been advised to write off the intellectual property due to recent cases of internet hacking. Any impairment test conducted on 31 December 2021 revealed that only goodwill of Dayang Bhd was impaired by RM600,000. viii. On 1 December 2021, all the three companies declared a final dividend of RM0.10 per share which has not been provided. The trade receivables of Dayang Bhd include RM1,000,000 due from Sayang Bhd. Sayang Bhd has remitted RM500,000 on 22 December 2021 but this remittance has not been received by Dayang Bhd as at 31 December 2021. It is the group policy to value the non-controlling interest at fair value. vi. vii. ix. On the date of acquisition, the fair value of Dayang Bhd's net assets were approximately equal to their carrying amounts with the exception of a piece of property. The property had a fair value of RM2,500,000 in excess of the carrying amount and this would create an additional depreciation of RM500,000 in the post- acquisition period to 31 December 2021. The fair values have not been reflected in the books of Dayang, Bhd. X. Required: Calculate controlling interest, goodwill and schedules of reserves for the year ended 31 December 2021. Show your workings. (25 marks) IT Sayang Bhd is a public listed company dealing with household utensil and equipment. The followings are the Statement of Financial Position of Sayang Bhd. Bayang Bhd and Dayang Bhd as at 31 December, 2021. Non-Current Assets Property, plant & Equipment Investment in Bayang Bhd Investment In Dayang Bhd Intellectual property Other investments Current Assets Inventories Trade receivables Cash & Cash Equivalents Total Assets Equity Ordinary Shares Retained profits Other reserves Total Equity Non-Current Liabilities Long term borrowings Deferred Tax Total Non-Current Liabilities Current Liabilities Trade Payables Tax payables Total Current Liabilities Total Equity & Liabilities Sayang Bhd Bayang Bhd RM'000 RM'000 165,000 57,500 2,500 5.000 230.000 62,500 27,500 95.000 185.000 415.000 210,000 85,000 25.000 320.000 30,000 20.000 50.000 32,500 12.500 45.000 415,000 25,000 60,000 1.500 86.500 30,000 14,000 17,500 61.500 148,000 50,000 39,500 12,500 102.000 15,000 12.500 27.500 12,500 6.000 18,500 148.000 Dayang Bhd RM'000 50,000 50.000 24,250 9,750 19,250 53.250 103,250 50,000 22,500 7.500 80.000 5,000 5.000 10.000 10,000 3.250 13,250 103,250 Additional information: i. ii. The number of ordinary shares of the three companies are as follows: Sayang Bhd Bayang Bhd Dayang Bhd 150,000,000 units 50,000,000 units 50,000,000 units Sayang Bhd acquired 80% of the equity shares of Bayang Bhd on 1 January 2021for RM57,500,000 when the retained profits and other reserves of Bayang Bhd stood at RM5,000,000 and RM2,500,000 respectively. At the date of acquisition, the fair value of the net assets was RM70,000,000. The excess of the fair value over the net assets is due to an increase in the value of freehold land of the company. The fair value of one ordinary share of Bayang Bhd on 1 January 2021 and 31 December 2021 were RM1.50 and RM2.50 respectively. On 1 January 2021, Bayang Bhd acquired 90% Dayang. Bhd when the retained profits and other reserves of Dayang. Bhd stood at RM10,000,000 and RM2,500,000 respectively. The values of Dayang Bhd's share at the date of acquisition was at RM1.32 per unit. iv. V. During the year 2021, Dayang. Bhd sold goods to Sayang Bhd for RM7,500,000 in the post-acquisition period at cost plus 20%. Half of the goods still remained unsold as at year end. The intellectual property is a software package designed for specific use in Sayang Bhd's accounting system. The company has been advised to write off the intellectual property due to recent cases of internet hacking. Any impairment test conducted on 31 December 2021 revealed that only goodwill of Dayang Bhd was impaired by RM600,000. viii. On 1 December 2021, all the three companies declared a final dividend of RM0.10 per share which has not been provided. The trade receivables of Dayang Bhd include RM1,000,000 due from Sayang Bhd. Sayang Bhd has remitted RM500,000 on 22 December 2021 but this remittance has not been received by Dayang Bhd as at 31 December 2021. It is the group policy to value the non-controlling interest at fair value. vi. vii. ix. On the date of acquisition, the fair value of Dayang Bhd's net assets were approximately equal to their carrying amounts with the exception of a piece of property. The property had a fair value of RM2,500,000 in excess of the carrying amount and this would create an additional depreciation of RM500,000 in the post- acquisition period to 31 December 2021. The fair values have not been reflected in the books of Dayang, Bhd. X. Required: Calculate controlling interest, goodwill and schedules of reserves for the year ended 31 December 2021. Show your workings. (25 marks)

Answer rating: 100% (QA)

Solution Profit and Loss and Other Compehensive Income Particulars Amount Particulars A... View the full answer