On 1 January 2018, Apple Berhad acquired 800,000 of the 1,000,000 shares of Grape Sdn. Bhd.....

  

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On 1 January 2018, Apple Berhad acquired 800,000 of the 1,000,000 shares of Grape Sdn. Bhd.. The financial year end for both companies is on 31 December annually. On 1 January 2018, the retained profit of Grape Sdn. Bhd. was RM140,000 (credit balance). On 1 January 2018, the fair value of land and building of Grape Sdn. Bhd. was RM30,000 and RM10,000 more than carrying amount. The remaining life of the building on 1 January 2018 was 10 years. There was no adjustment in the book of Grape Sdn. Bhd. for the fair value impacts. The statement of financial position of Apple Berhad and Grape Sdn. Bhd. as at 31 December 2020 are as follows: Land Building at cost Accumulated depreciation Other non-current assets Investment in Grape Sdn. Bhd. Current assets Current liabilities Ordinary share capital Retained profit Apple Berhad RM 200,000 900,000 (100,000) 200,000 1,500,000 300,000 (200,000) 2,800,000 2,000,000 800,000 2,800,000 Grape Sdn. Bhd. RM 200,000 800,000 (200,000) 400,000 60,000 (40,000) 1,220,000 1,000,000 220,000 1,220,000 Required: a) Calculate the goodwill on consolidation. b) with respect to the fair value adjustment, prepare the journal entries to record for the: i) fair value adjustment for land and building on the acquisition date. ii) accumulated depreciation as at 31 December 2020. c) Calculate the consolidated retained profit and non-controlling interest as at 31 December 2020. On 1 January 2018, Apple Berhad acquired 800,000 of the 1,000,000 shares of Grape Sdn. Bhd.. The financial year end for both companies is on 31 December annually. On 1 January 2018, the retained profit of Grape Sdn. Bhd. was RM140,000 (credit balance). On 1 January 2018, the fair value of land and building of Grape Sdn. Bhd. was RM30,000 and RM10,000 more than carrying amount. The remaining life of the building on 1 January 2018 was 10 years. There was no adjustment in the book of Grape Sdn. Bhd. for the fair value impacts. The statement of financial position of Apple Berhad and Grape Sdn. Bhd. as at 31 December 2020 are as follows: Land Building at cost Accumulated depreciation Other non-current assets Investment in Grape Sdn. Bhd. Current assets Current liabilities Ordinary share capital Retained profit Apple Berhad RM 200,000 900,000 (100,000) 200,000 1,500,000 300,000 (200,000) 2,800,000 2,000,000 800,000 2,800,000 Grape Sdn. Bhd. RM 200,000 800,000 (200,000) 400,000 60,000 (40,000) 1,220,000 1,000,000 220,000 1,220,000 Required: a) Calculate the goodwill on consolidation. b) with respect to the fair value adjustment, prepare the journal entries to record for the: i) fair value adjustment for land and building on the acquisition date. ii) accumulated depreciation as at 31 December 2020. c) Calculate the consolidated retained profit and non-controlling interest as at 31 December 2020.

Answer rating: 100% (QA)

a Calculation of Goodwill on Consolidation The acquisition cost of the investment in Grape Sdn Bhd is RM800000 The share of retained profit of Grape S... View the full answer