Question $2$ Learning LO$2$: Prepare consolidated financial statements for a complex group structure and its changes in the composition of the group On $1$ January $2021,$ Raqib Construction Bhd$.($RCB$)$ acquired a $\backslash (90\backslash \%\backslash )$ ownership interest in Cider Construction Sdn Bhd $($CCSB$)$ for RM$500,000.$ On the same date, RCB also acquired $\backslash (70\backslash \%\backslash )$ of Gary Construction Sdn Bhd $($GCSB$)$ for RM$350,000.$ The net assets on the date of purchase and year$-$ end for both CCSB and GCSB were as follows: $\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|$l$|\}\backslash$hline & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$CCSB$\}$ & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$GCSB$\}\backslash \backslash \backslash$hline & $1/1/2021$ & $31/12/2023$ & $1/1/2021$ & $31/12/2023\backslash \backslash \backslash$hline & RM & RM & RM & RM $\backslash \backslash \backslash$hline Other Components of Equity & $50,000$ & $300,000$ & $100,000$ & $250,000\backslash \backslash \backslash$hline Retained Earnings & $10,000$ & $500,000$ & $50,000$ & $275,000\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}$ On $30$ September $2023,$ RCB disposed of $60,000$ shares of interest in CCSB for RM$200,000.$ RCB received cash for its disposal. The following were the accounts balances $($extract$)$ taken from the records of the three companies as of $31$ December $2023.\backslash$begin$\{$tabular$\}\{|$l$|$c$|$c$|$c$|\}\backslash$hline & RCB $($RM$\text{'}000)$ & CCSB $($RM$\text{'}000)$ & GCSB $($RM$\text{'}000)\backslash \backslash \backslash$hline Net Income before Tax & $1,300$ & $600$ & $300\backslash \backslash \backslash$hline Tax Expenses & $\backslash ((325)\backslash )$ & $\backslash ((150)\backslash )$ & $\backslash ((75)\backslash )\backslash \backslash \backslash$hline Net Income after Tax & $975$ & $450$ & $225\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|$l$|\}\backslash$hline Beginning Retained Earnings & $2,225$ & $110$ & $100\backslash \backslash \backslash$hline Dividends Paid & $(200)$ & $(100)$ & $(50)\backslash \backslash \backslash$hline Endings Retained Earnings & $3,000$ & $460$ & $275\backslash \backslash \backslash$hline & & & $\backslash \backslash \backslash$hline Share Capital of RM$1$ each & $5,000$ & $400$ & $200\backslash \backslash \backslash$hline Retained Earnings & $3,000$ & $460$ & $275\backslash \backslash \backslash$hline Other components of Equity & $1,100$ & $300$ & $250\backslash \backslash \backslash$hline Sales of Shares $-$ Suspense & $200$ & $-$ & $-\backslash \backslash \backslash$hline Total Liabilities & $1,000$ & $490$ & $475\backslash \backslash \backslash$hline & $10,300$ & $1,650$ & $1,200\backslash \backslash \backslash$hline & & & $\backslash \backslash \backslash$hline Investment at a cost: & & & $\backslash \backslash \backslash$hline Subsidiaries & $850$ & $-$ & $-\backslash \backslash \backslash$hline Quoted Shares & $100$ & & $\backslash \backslash \backslash$hline Other Assets & $9,350$ & $1,650$ & $1,200\backslash \backslash \backslash$hline & $10,300$ & $1,650$ & $1,200\backslash \backslash \backslash$hline $\backslash$end$\{$tabular$\}1$

Additional information:

The shareholders' funds are assumed to be representative of the fair values of the identifiable

assets of CCSB and GCSB at the date of acquisitions. It is the group policy to allocate

goodwill to Non$-$Controlling Interest $($NCI$)$ and there was no impairment of goodwill for the

current year.

During the year RCB bought merchandise from GCSB for RM$500,000$ in total. The year$-$

end inventory of RCB included RM$100,000$ purchased from GCSB$.$ The inventory cost for

GCSB was RM$50,000.$

On $31$ December $2023,$ RCB sold a used machine to GCSB for RM$50,000.$ The carrying