On 1 January 2017, Bonda Bhd acquired an 80% interest in the equity capital of Anak...

    

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On 1 January 2017, Bonda Bhd acquired an 80% interest in the equity capital of Anak Bhd for a cash consideration of RM16,000,000. On this date, the retained earnings of Anak Bhd were RM6,000,000. The draft accounts of the two companies for the current year ended 31 December 2020 are as follows: Sales Cost of sales: Opening inventories Purchases Closing inventories Gross profit Operating expenses Gain on sale of properties Profit from operations Finance cost Dividend income Profit before taxation Taxation Profit for the year Statements of Profit or Loss Bonda Bhd Anak Bhd RM'000 RM'000 RM'000 RM'000 24,000 12,000 (8,000) (18,000) (26,000) 10,000 (16,000) 8,000 (1,760) 2,280 8,520 (240) 1,120 9,400 (1.800) 7,600 (6,000) (8,000) (14,000) 6,000 (8,000) 4,000 (800) 2,000 5,200 (200) 5,000 (900) 4,100 Taxation Profit for the year Movements in Retained Earnings: Retained earnings brought forward Profit for the year Dividends paid Assets Non-Current Assets Property, plant and equipment Investment in Anak Bhd, at cost Current Assets Inventories Statements of Financial Position Trade and other receivables Bank Equity and Liabilities Equity Share capital (32 million ordinary shares) Retained earnings (1,800) 7,600 10,000 7.600 17,600 (2,600) 15,000 10,000 10,560 11,960 Bonda Bhd RM'000 RM'000 21,000 16,000 32,520 69,520 32,000 15,000 47,000 (900) 4.100 Time left 3:13 6,000 8,000 9,000 9,300 4.100 13,400 (1,400) 12,000 Anak Bhd RM'000 RM'000 11,600 23,000 34,600 8,000 12,000 20,000 Non-Current Liabilities Long-term loans Current Liabilities Trade and other payables Taxation Bills payable 2. 4,420 1,800 1,300 3. 15,000 7.520 69,520 3,050 850 700 10,000 The following information is relevant: 1. Included in the property, plant and equipment of Anak Bhd was freehold land recorded at cost of RM2,000,000. At the acquisition date, this land had a fair value of RM6,000,000. No adjustment has been made in the accounts to reflect the fair value. During 2020, Bonda Bhd purchased inventories for RM4,000,000 from Anak Bhd. Of this amount, RM1,200,000 remained in the closing inventories of Bonda Bhd at 31 December 2020. The corresponding intragroup sales and closing inventories figures for the 2019 financial year were RM6,000,000 and RM1,600,000 respectively. The profit margin to Anak Bhd was 25% on selling price. Bonda Bhd manufactures heavy machinery for sale to customers. In 2018, it transferred two such machines to Anak Bhd for the latter's use as property, plant and equipment. The transfer price was RM2,000,000 and Bonda Bhd recorded a. RM800,000 profit from the transfer. The group depreciated property, plant and equipment of this type on a straight-line basis over five years, charging a full year's depreciation in the year of purchase. 4.600 34,600 Required: (a) (b) Prepare the consolidated statement of profit or loss of Bonda Bhd for the year ended 31 December 2020. (9 marks) Prepare the consolidated statement of financial position of Bonda Bhd as at 31 December 2020. (11 marks) On 1 January 2017, Bonda Bhd acquired an 80% interest in the equity capital of Anak Bhd for a cash consideration of RM16,000,000. On this date, the retained earnings of Anak Bhd were RM6,000,000. The draft accounts of the two companies for the current year ended 31 December 2020 are as follows: Sales Cost of sales: Opening inventories Purchases Closing inventories Gross profit Operating expenses Gain on sale of properties Profit from operations Finance cost Dividend income Profit before taxation Taxation Profit for the year Statements of Profit or Loss Bonda Bhd Anak Bhd RM'000 RM'000 RM'000 RM'000 24,000 12,000 (8,000) (18,000) (26,000) 10,000 (16,000) 8,000 (1,760) 2,280 8,520 (240) 1,120 9,400 (1.800) 7,600 (6,000) (8,000) (14,000) 6,000 (8,000) 4,000 (800) 2,000 5,200 (200) 5,000 (900) 4,100 Taxation Profit for the year Movements in Retained Earnings: Retained earnings brought forward Profit for the year Dividends paid Assets Non-Current Assets Property, plant and equipment Investment in Anak Bhd, at cost Current Assets Inventories Statements of Financial Position Trade and other receivables Bank Equity and Liabilities Equity Share capital (32 million ordinary shares) Retained earnings (1,800) 7,600 10,000 7.600 17,600 (2,600) 15,000 10,000 10,560 11,960 Bonda Bhd RM'000 RM'000 21,000 16,000 32,520 69,520 32,000 15,000 47,000 (900) 4.100 Time left 3:13 6,000 8,000 9,000 9,300 4.100 13,400 (1,400) 12,000 Anak Bhd RM'000 RM'000 11,600 23,000 34,600 8,000 12,000 20,000 Non-Current Liabilities Long-term loans Current Liabilities Trade and other payables Taxation Bills payable 2. 4,420 1,800 1,300 3. 15,000 7.520 69,520 3,050 850 700 10,000 The following information is relevant: 1. Included in the property, plant and equipment of Anak Bhd was freehold land recorded at cost of RM2,000,000. At the acquisition date, this land had a fair value of RM6,000,000. No adjustment has been made in the accounts to reflect the fair value. During 2020, Bonda Bhd purchased inventories for RM4,000,000 from Anak Bhd. Of this amount, RM1,200,000 remained in the closing inventories of Bonda Bhd at 31 December 2020. The corresponding intragroup sales and closing inventories figures for the 2019 financial year were RM6,000,000 and RM1,600,000 respectively. The profit margin to Anak Bhd was 25% on selling price. Bonda Bhd manufactures heavy machinery for sale to customers. In 2018, it transferred two such machines to Anak Bhd for the latter's use as property, plant and equipment. The transfer price was RM2,000,000 and Bonda Bhd recorded a. RM800,000 profit from the transfer. The group depreciated property, plant and equipment of this type on a straight-line basis over five years, charging a full year's depreciation in the year of purchase. 4.600 34,600 Required: (a) (b) Prepare the consolidated statement of profit or loss of Bonda Bhd for the year ended 31 December 2020. (9 marks) Prepare the consolidated statement of financial position of Bonda Bhd as at 31 December 2020. (11 marks)

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