On 1 April 2017, Misha Bhd. had a number of subsidiary companies and one associate company....

   

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On 1 April 2017, Misha Bhd. had a number of subsidiary companies and one associate company. During the year ended 31 March 2018, Misha Bhd. acquired 80,000 of Parsley Bhd.'s 100,000 ordinary shares. There were no other changes in the composition of the group during the year ended 31 March 2018. The group's consolidated income statement for the year ended 31 March 2018 and consolidated statement of financial position as at that date are set out below, together with some additional information. Consolidated Income Statement for the year ended 31 March 2018 (extract) RM 689,600 Profit from operations Finance cost Share of profits of associate Profit before tax Income tax expense Profit for the period Attributable to: Equity holders of Misha Bhd. Non-controlling interest Non-current assets Intangibles Investment in associate Consolidated Statement of Financial Position as at 31 March 2018 RM Current assets Trade and other receivables Cash and cash equivalents Total assets Equity Ordinary share capital Retained earnings Non-controlling interest (35,000) 125,800 780,400 (195,000) 585,400 Current liabilities Trade and other payables Income tax payable Bank overdraft Total equity and liabilities 439,500 145,900 585,400 1,799,700 623,600 2,423,300 401,900 1,600 403,500 2,826,800 870,000 715,000 357,200 1,942,200 66,600 205,000 613,000 2,826,800 2017 RM 769,500 514,100 1,283,600 399,600 25,400 425,000 1,708,600 600,000 358,500 258,600 1,217,100 58,500 180,000 253,000 1,708,600 Additional information: 1. The consideration to acquire the shares in Parsley Bhd. consisted of 100,000 ordinary shares in Misha Bhd. with a market value of RM1.25 per share, and a considerable cash sum. Two months after the acquisition of Parsley Bhd., Misha Bhd. made a further issue of ordinary shares for cash, unrelated to the acquisition of Parsley Bhd. 2. At the date of acquisition, the statement of financial position of Parsley Bhd. showed the following assets and liabilities. Intangibles (development expenditure) Trade and other receivables Cash and cash equivalents Trade and other payables RM 320,000 52,000 1,500 (48,000) 325,500 The carrying amounts of all assets and liabilities above were equal to their fair values, with the exception of intangibles, which had a fair value of RM50,000 in excess of their carrying amount. Goodwill arising on the acquisition of Parsley Bhd. was RM156,000. 3. The consolidated statement of changes in equity for the year shows that Misha Bhd. paid ordinary dividends during the year. 4. Consolidated intangibles comprise the goodwill arising on the acquisition of Parsley Bhd.. which has suffered no subsequent impairment, and development expenditure capitalised in accordance with MFRS 138, Intangible Assets. The development expenditure is being amortised over its estimated useful life. Since acquiring Parsley Bhd., the group has spent cash of RM950,000 on new development projects. All of this expenditure was correctly capitalised. 5. Trade and other payables includes accrued interest of RM1,000 (2017: RM1,500). Required: Prepare a Consolidated Statement of Cash Flows for Misha Bhd. for the year ended 31 March 2018, including a note reconciling profit before tax to cash generated from operations, using the indirect method. A note showing the effects of the acquisition of Parsley Bhd. is not required. On 1 April 2017, Misha Bhd. had a number of subsidiary companies and one associate company. During the year ended 31 March 2018, Misha Bhd. acquired 80,000 of Parsley Bhd.'s 100,000 ordinary shares. There were no other changes in the composition of the group during the year ended 31 March 2018. The group's consolidated income statement for the year ended 31 March 2018 and consolidated statement of financial position as at that date are set out below, together with some additional information. Consolidated Income Statement for the year ended 31 March 2018 (extract) RM 689,600 Profit from operations Finance cost Share of profits of associate Profit before tax Income tax expense Profit for the period Attributable to: Equity holders of Misha Bhd. Non-controlling interest Non-current assets Intangibles Investment in associate Consolidated Statement of Financial Position as at 31 March 2018 RM Current assets Trade and other receivables Cash and cash equivalents Total assets Equity Ordinary share capital Retained earnings Non-controlling interest (35,000) 125,800 780,400 (195,000) 585,400 Current liabilities Trade and other payables Income tax payable Bank overdraft Total equity and liabilities 439,500 145,900 585,400 1,799,700 623,600 2,423,300 401,900 1,600 403,500 2,826,800 870,000 715,000 357,200 1,942,200 66,600 205,000 613,000 2,826,800 2017 RM 769,500 514,100 1,283,600 399,600 25,400 425,000 1,708,600 600,000 358,500 258,600 1,217,100 58,500 180,000 253,000 1,708,600 Additional information: 1. The consideration to acquire the shares in Parsley Bhd. consisted of 100,000 ordinary shares in Misha Bhd. with a market value of RM1.25 per share, and a considerable cash sum. Two months after the acquisition of Parsley Bhd., Misha Bhd. made a further issue of ordinary shares for cash, unrelated to the acquisition of Parsley Bhd. 2. At the date of acquisition, the statement of financial position of Parsley Bhd. showed the following assets and liabilities. Intangibles (development expenditure) Trade and other receivables Cash and cash equivalents Trade and other payables RM 320,000 52,000 1,500 (48,000) 325,500 The carrying amounts of all assets and liabilities above were equal to their fair values, with the exception of intangibles, which had a fair value of RM50,000 in excess of their carrying amount. Goodwill arising on the acquisition of Parsley Bhd. was RM156,000. 3. The consolidated statement of changes in equity for the year shows that Misha Bhd. paid ordinary dividends during the year. 4. Consolidated intangibles comprise the goodwill arising on the acquisition of Parsley Bhd.. which has suffered no subsequent impairment, and development expenditure capitalised in accordance with MFRS 138, Intangible Assets. The development expenditure is being amortised over its estimated useful life. Since acquiring Parsley Bhd., the group has spent cash of RM950,000 on new development projects. All of this expenditure was correctly capitalised. 5. Trade and other payables includes accrued interest of RM1,000 (2017: RM1,500). Required: Prepare a Consolidated Statement of Cash Flows for Misha Bhd. for the year ended 31 March 2018, including a note reconciling profit before tax to cash generated from operations, using the indirect method. A note showing the effects of the acquisition of Parsley Bhd. is not required.

Answer rating: 100% (QA)

CALCULATIONS Operating Activities Profit Before Tax Profit before tax RM 780400 Adjustments Depreciation and Amortization RM 159600 Share of Profits of Associate RM 125800 Note Negative because its an ... View the full answer