The draft summarised statements of comprehensive income of three companies for the year ended 31 December...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The draft summarised statements of comprehensive income of three companies for the year ended 31 December 2020 are shown below: Pastries Vanilla Milk Berhad Berhad Berhad RM'O00 RM'000 RM'000 Revenue 6,800 4,200 5,580 Cost of sales (2,720) (1,565) (В.220) Gross profit 4,080 2,635 2,360 Selling expenses (720) (520) (160) General administrative expenses (1,470) (1,115) (1,310) Profit from operations 1,890 1,000 890 Dividend income from Vanilla Bhd 20 Dividend income from Earth Bhd 40 Interest expense (425) (125) (40) Profit before tax 1,525 875 840 Тах expense (280) (175) (170) Profit for the year 1.245 700 670 The following information is also available: 1. On 1 January 2015, Pastries Berhad acquired 300,000 ordinary shares of Vanilla Berhad for RM650,000. The issued share capital of Vanilla Berhad at that date amounted to 500,000 ordinary RM1 shares. Vanilla Berhad's retained earnings on 1 January 2015 amounted to RM237,50o. 2. Pastries Berhad acquired 80% of the ordinary RM1 shares in Milk Berhad on 1 January 2018 for RM276,000. On that date, Milk Berhad's share capital amounted to RM240,000 and its accumulated retained earnings was reported at RM148,000. 3. Since Pastries Berhad's acquisition of shares in Vanilla Berhad and Milk Berhad, there have been no changes in the share capital of these two companies. The issued share capital of Pastries Berhad at 31 December 2020 consisted of 600,000 ordinary RM1 shares. On 24 December 2020, the respective boards of directors proposed a dividend for the year of 8 sen per share to be payable by each of the three companies. The proposed dividend has not yet been reflected in the respective companies' draft financial statements. 4. On 15 May 2020, Pastries Berhad sold inventory to Milk Berhad for RM180,000, at a mark-up of 20% on cost. Half of this inventory was unsold by Milk Berhad at 31 December 2020. 5. During the year ended 31 December 2020, Pastries Berhad purchased goods from Vanilla Berhad for RM1,600,000. At the year end, Pastries Berhad's closing inventory included goods purchased from Vanilla Berhad for RM300,000. Vanilla Berhad prices its goods at a mark-up of 25% on cost. 6. Pastries Berhad also received and recognised a dividend of RM40,000 from its 25% shareholdings in the ordinary share capital of Earth Berhad. 7. Following the annual impairment review of goodwill arising on consolidation, it was decided that the goodwill arising in respect of Vanilla Berhad should be written-off by RM15,600 in the year ended 31 December 2020. At 31 December 2019, the cumulative amount written-off due to impairment of goodwill arising on the acquisition of Vanilla Berhad amounted to RM10,000. 8. At 1 January 2020, the retained earnings of Pastries Berhad, Vanilla Berhad and Milk Berhad were RM980,000, RM545,000 and RM320,000, respectively. 9. Pastries Group values the non-controlling interest using the proportion of net assets method. Required: (a) Calculate the goodwill arising from Pastries Berhad's acquisition of Vanilla Berhad and Milk Berhad. (11.5 marks) (b) Prepare the consolidated income statement for Pastries Berhad and its subsidiaries for the year ended 31 December 2020 (145 marks) in the share capital of these two companies. The issued share capital of Pastries Berhad at 31 December 2020 consisted of 600,000 ordinary RM1 shares. On 24 December 2020, the respective boards of directors proposed a dividend for the year of 8 sen per share to be payable by each of the three companies. The proposed dividend has not yet been reflected in the respective companies' draft financial statements. 4. On 15 May 2020, Pastries Berhad sold inventory to Milk Berhad for RM180,000, at a mark-up of 20% on cost. Half of this inventory was unsold by Milk Berhad at 31 December 2020. 5. During the year ended 31 December 2020, Pastries Berhad purchased goods from Vanilla Berhad for RM1,600,000. At the year end, Pastries Berhad's closing inventory included goods purchased from Vanilla Berhad for RM300,000. Vanilla Berhad prices its goods at a mark-up of 25% on cost. 6. Pastries Berhad also received and recognised a dividend of RM400,000 from its 25% shareholdings in the ordinary share capital of Earth Berhad. 7. Following the annual impairment review of goodwill arising on consolidation, it was decided that the goodwill arising in respect of Vanilla Berhad should be written-off by RM15,600 in the year ended 31 December 2020. At 31 December 2019, the cumulative amount written-off due to impairment of goodwill arising on the acquisition of Vanilla Berhad amounted to RM10,00o. 8. At 1 January 2020, the retained earnings of Pastries Berhad, Vanilla Berhad and Milk Berhad were RM980,000, RM545,000 and RM320,000, respectively. 9. Pastries Group values the non-controlling interest using the proportion of net assets method. Required: (a) Calculate the goodwill arising from Pastries Berhad's acquisition of Vanilla Berhad and Milk Berhad. (11.5 marks) (b) Prepare the consolidated income statement for Pastries Berhad and its subsidiaries for the year ended 31 December 2020. (14.5 marks) (c) Prepare an extract of the Statement of Changes in Equity showing the movements in the group's retained earnings during the year ended 31 December 2020. (4 marks) Total: 30 marks The draft summarised statements of comprehensive income of three companies for the year ended 31 December 2020 are shown below: Pastries Vanilla Milk Berhad Berhad Berhad RM'O00 RM'000 RM'000 Revenue 6,800 4,200 5,580 Cost of sales (2,720) (1,565) (В.220) Gross profit 4,080 2,635 2,360 Selling expenses (720) (520) (160) General administrative expenses (1,470) (1,115) (1,310) Profit from operations 1,890 1,000 890 Dividend income from Vanilla Bhd 20 Dividend income from Earth Bhd 40 Interest expense (425) (125) (40) Profit before tax 1,525 875 840 Тах expense (280) (175) (170) Profit for the year 1.245 700 670 The following information is also available: 1. On 1 January 2015, Pastries Berhad acquired 300,000 ordinary shares of Vanilla Berhad for RM650,000. The issued share capital of Vanilla Berhad at that date amounted to 500,000 ordinary RM1 shares. Vanilla Berhad's retained earnings on 1 January 2015 amounted to RM237,50o. 2. Pastries Berhad acquired 80% of the ordinary RM1 shares in Milk Berhad on 1 January 2018 for RM276,000. On that date, Milk Berhad's share capital amounted to RM240,000 and its accumulated retained earnings was reported at RM148,000. 3. Since Pastries Berhad's acquisition of shares in Vanilla Berhad and Milk Berhad, there have been no changes in the share capital of these two companies. The issued share capital of Pastries Berhad at 31 December 2020 consisted of 600,000 ordinary RM1 shares. On 24 December 2020, the respective boards of directors proposed a dividend for the year of 8 sen per share to be payable by each of the three companies. The proposed dividend has not yet been reflected in the respective companies' draft financial statements. 4. On 15 May 2020, Pastries Berhad sold inventory to Milk Berhad for RM180,000, at a mark-up of 20% on cost. Half of this inventory was unsold by Milk Berhad at 31 December 2020. 5. During the year ended 31 December 2020, Pastries Berhad purchased goods from Vanilla Berhad for RM1,600,000. At the year end, Pastries Berhad's closing inventory included goods purchased from Vanilla Berhad for RM300,000. Vanilla Berhad prices its goods at a mark-up of 25% on cost. 6. Pastries Berhad also received and recognised a dividend of RM40,000 from its 25% shareholdings in the ordinary share capital of Earth Berhad. 7. Following the annual impairment review of goodwill arising on consolidation, it was decided that the goodwill arising in respect of Vanilla Berhad should be written-off by RM15,600 in the year ended 31 December 2020. At 31 December 2019, the cumulative amount written-off due to impairment of goodwill arising on the acquisition of Vanilla Berhad amounted to RM10,000. 8. At 1 January 2020, the retained earnings of Pastries Berhad, Vanilla Berhad and Milk Berhad were RM980,000, RM545,000 and RM320,000, respectively. 9. Pastries Group values the non-controlling interest using the proportion of net assets method. Required: (a) Calculate the goodwill arising from Pastries Berhad's acquisition of Vanilla Berhad and Milk Berhad. (11.5 marks) (b) Prepare the consolidated income statement for Pastries Berhad and its subsidiaries for the year ended 31 December 2020 (145 marks) in the share capital of these two companies. The issued share capital of Pastries Berhad at 31 December 2020 consisted of 600,000 ordinary RM1 shares. On 24 December 2020, the respective boards of directors proposed a dividend for the year of 8 sen per share to be payable by each of the three companies. The proposed dividend has not yet been reflected in the respective companies' draft financial statements. 4. On 15 May 2020, Pastries Berhad sold inventory to Milk Berhad for RM180,000, at a mark-up of 20% on cost. Half of this inventory was unsold by Milk Berhad at 31 December 2020. 5. During the year ended 31 December 2020, Pastries Berhad purchased goods from Vanilla Berhad for RM1,600,000. At the year end, Pastries Berhad's closing inventory included goods purchased from Vanilla Berhad for RM300,000. Vanilla Berhad prices its goods at a mark-up of 25% on cost. 6. Pastries Berhad also received and recognised a dividend of RM400,000 from its 25% shareholdings in the ordinary share capital of Earth Berhad. 7. Following the annual impairment review of goodwill arising on consolidation, it was decided that the goodwill arising in respect of Vanilla Berhad should be written-off by RM15,600 in the year ended 31 December 2020. At 31 December 2019, the cumulative amount written-off due to impairment of goodwill arising on the acquisition of Vanilla Berhad amounted to RM10,00o. 8. At 1 January 2020, the retained earnings of Pastries Berhad, Vanilla Berhad and Milk Berhad were RM980,000, RM545,000 and RM320,000, respectively. 9. Pastries Group values the non-controlling interest using the proportion of net assets method. Required: (a) Calculate the goodwill arising from Pastries Berhad's acquisition of Vanilla Berhad and Milk Berhad. (11.5 marks) (b) Prepare the consolidated income statement for Pastries Berhad and its subsidiaries for the year ended 31 December 2020. (14.5 marks) (c) Prepare an extract of the Statement of Changes in Equity showing the movements in the group's retained earnings during the year ended 31 December 2020. (4 marks) Total: 30 marks
Expert Answer:
Answer rating: 100% (QA)
Consolidated statement of Profit and loss ac Particulars SUDU GARFU SUDU Consolidated Turnover 17000... View the full answer
Related Book For
Accounting For Cambridge International AS And A Level
ISBN: 9780198399711
1st Edition
Authors: Jacqueline Halls Bryan, Peter Hailstone
Posted Date:
Students also viewed these accounting questions
-
The following information is available for the year ended 31 March 20X6 (values in $m): Present value of scheme liabilities at 1 April 20X5 $1,007; Fair value of plan assets at 1 April 20X5 $844;...
-
The financial statements for Lucky Ltd for the year ended 31 December 2014 were as follows. Additional information: Dividends paid during the year $60, 000 Retained earnings al 1 January 2014:...
-
For the year ended 31 December 2019, Encik Remmy received annual salary of RM360,000. Besides, he received the following employment income and benefits from the company: Bonus equivalent to 1 month...
-
1/ You just started working and you planned to save $5,000 every year in your retirement account. How much money will you have in your retirement account once you retire in 40 years? Your retirement...
-
Consider the following hypotheses: H 0 : p < 0.24 H 1 : p > 0.24 Given that p = 0.277, n = 130, and = 0.05, answer the following questions: a. What conclusion should be drawn? b. Determine the p...
-
The following correlation matrix shows the pairwise correlations among three variables. The variables are the expert ratings assigned to wines by well-known connoisseurs (from 0 to 100), the year of...
-
Reconsider the data in the previous problem. The response measurements in the two columns were collected on two different days. Fit a new model \[ y=\theta_{3} x_{2}+\theta_{1} e^{\theta_{2}...
-
Select the best answer. 1. The traditional business model of accounting is inadequate for governments and not-for-prot organizations primarily because businesses differ from governments and...
-
Sparkit issued 2 0 - year bonds with a face value of $ 2 , 0 0 0 , 0 0 0 . The interest is paid semiannually. The market rate of interest was 7 % . If the proceeds were $ 1 , 7 8 6 , 4 4 9 . 2 8 ,...
-
Lombard Ltd has been offered a contract for which there is available production capacity. The contract is for 20,000 identical items, manufactured by an intricate assembly operation, to be produced...
-
In 2022, the top five destinations for FDI were the US, Germany, the UK, India, and China. Around 43 percent of all outbound FDI came from the US, the UK, Germany, Japan, and France. The three...
-
Gomez Inc. will deposit $30,000 in a 12% fund at the end of each year for 8 years beginning December 31, 2015. What amount will be in the fund immediately after the last deposit?
-
In May 2022, Indias commerce and industry ministry announced the highest ever FDI inflow, amounting to $83.57 billion in 202122. The key areas attracting investments were manufacturing, computer...
-
Professional Research At a recent meeting of the accounting staff in your company, the controller raised the issue of using present value techniques to conduct impairment tests for some of the...
-
You are an economic advisor to Papua New Guinea, a prospective member of the Association of Southeast Asian Nations (ASEAN). The group was founded in 1967 when the Bangkok Declaration was signed by...
-
Since Ryanair DAC's2 emergence as an upstart challenger to the Aer Lingus Ltd.-British Airways plc duopoly in the late 1980s, it had been both a consumer champion and antagonist; a technological...
-
To help you become familiar with the accounting standards, this case is designed to take you to the FASBs Web site and have you access various publications. Access the FASBs Web site at...
-
A limited company's records show the following. If the directors declare a 10 percent dividend, what will shareholders receive? A. $50,000 B. $70,000 C. $100,000 D. $220,000 $ Authorised capital 1...
-
A company has an issued sham capital of 100 000 ordinary shares of $1 each. On 1 June, the company makes a bonus issue of one ordinary share for every four shares held. On 1 September, the company...
-
The following information is available for a sailing club. What is the value of the club's accumulated fund at 1 January 2015? Cash in hand at 1 January 2015 20 Sailing equipment valuation Prepaid...
-
You are setting up a chatbot agency to service marketing, sales and customer services teams. Discuss the advantages and disadvantages of setting up the business as a sole trader or company and the...
-
Principles for Responsible Management Education (PRME) is a not-for-profit entity. It engages business schools to ensure they provide future leaders with the skills needed to balance economic and...
-
Discuss why the cash received from providing a service is revenue, yet the cash contributed by the owner is not revenue.
Study smarter with the SolutionInn App