On 31 December 2016, Simone Bhd. acquired 150,000 RM1 ordinary shares in Peres Sdn. Bhd. for a consideration of RM300,000. The consideration was settled by Peres Sdn. Bhd.’s shareholders accepting 100,000, RM1 ordinary shares in Peres Sdn. Bhd. valued at RM3.00 each. On the same day, Simone Bhd bought 20,000 8% preference shares in Peres Sdn. Bhd. for a cash consideration of RM30,000.

The statements of financial position of Simone Bhd. and Peres Sdn. Bhd. at 31 December 2018 were as follows:

	Simone Bhd.		Peres Sdn. Bhd.
	RM	RM	RM	RM
Property, plant and equipment:		372,500		198,950
Freehold land, at cost		501,500		113,400
Plant, at net book value		120,000		150,000
Machinery and equipment		40,000		20,000
Patents and trademarks
Investments in Peres Sdn. Bhd.:
150,000 ordinary shares		300,000
20,000 preference shares		30,000
Loans to Peres Sdn. Bhd.		59,000
Current assets:
Inventories	130,000		62,650
Trade receivables	88,000		30,000
Other receivables	37,500		5,000
Bank	10,000	265,500	6,000	103,650
		1,688,500		586,000
Ordinary shares of RM1 each		800,000		200,000
8% preference shares of RM1 each		-		100,000
Share premium account		300,000		10,000
General reserves		50,000		12,000
Retained profits		284,000		38,400
Shareholders’ funds		1,434,000		360,400
Loan from Simone Bhd.		-		59,000
Current liabilities:
Trade payables	98,500		52,600
Other payables	80,000		50,000
Taxation	76,000	254,500	64,000	166,600
		1,688,500		586,000

The followings are the relevant information:

1. On 31 December 2016, Peres Sdn. Bhd. had RM8,000 and RM20,000 in the general reserves and retained profits respectively. The share premium account of RM10,000 arose prior to 31 December 2016.
2. The freehold land of Peres Sdn. Bhd. had a fair value of RM100,000 in excess of its book value at 31 December 2016. No adjustment had been made in the accounts of Peres Sdn. Bhd. for this fair value.
3. On 31 December 2016, the inventories of Peres Sdn. Bhd. were assessed to be over-valued by RM20,000. These inventories at acquisition date were fully realized in 2017 and 2018.
4. On 31 December 2016, Simone Bhd. revalued Peres Sdn. Bhd.’s plant at RM164,000, at which time its written down book value was RM140,000. Peres Sdn. Bhd.’s account was not adjusted to give effect to the revaluation. There were neither plant additions nor disposals by Peres Sdn. Bhd. in 2017 or 2018. Depreciation on plant was calculated at the rate of 10% per annum on the reducing balance method.
5. The preference shares of Peres Sdn. Bhd. were classified and presented as equity. The preference dividends of 2018 were paid by Peres Sdn. Bhd. on 31 December 2018.

Required:

Prepare a consolidated statement of financial position of Simone Bhd. as at 31 December 2018.

Answer rating: 100% (QA)

Consolidated statement of financial position of Simone Bhd as at 31 De... View the full answer