Vella Bhd acquired 75% ordinary shares of Tiktok Bhd on 1 January 2010 at a bargain...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Vella Bhd acquired 75% ordinary shares of Tiktok Bhd on 1 January 2010 at a bargain purchase of RM3 million. The fair value of Tiktok Bhd at the acquisition date is derived as follows: RM Million Ordinary shares 100 Retained profit 23 Vella Bhd and Tiktok Bhd ordinary shares' market value was RM2.30 and RM1.80 each respectively on 1 January 2010. On 1 February 2019, Vella Bhd disposed 20 million ordinary shares in Tiktok Bhd for RM40 million. Vella Bhd and Tiktok Bhd ordinary shares registered market values of RM2.50 and RM2.00 each on 1 February 2019. The retained profit of Tiktok Bhd stood at RM35 million on this date. On 1 March 2019, Vella Bhd disposed another 10 million ordinary shares in Tiktok Bhd at RM1.95 each. The accounting period of the two companies ends at 30 June. On the average, Tiktok Bhd registered RM1 million profits each month for the accounting year ending 30 June 2019. Required: a. Discuss the related consolidation issues when Vella Bhd prepared its Consolidated Profit or Loss and Other Comprehensive Income for 2019. (10 marks) b. Ascertain the profit/loss on disposal of shares on both dates for the group only. (5 marks) Vella Bhd acquired 75% ordinary shares of Tiktok Bhd on 1 January 2010 at a bargain purchase of RM3 million. The fair value of Tiktok Bhd at the acquisition date is derived as follows: RM Million Ordinary shares 100 Retained profit 23 Vella Bhd and Tiktok Bhd ordinary shares' market value was RM2.30 and RM1.80 each respectively on 1 January 2010. On 1 February 2019, Vella Bhd disposed 20 million ordinary shares in Tiktok Bhd for RM40 million. Vella Bhd and Tiktok Bhd ordinary shares registered market values of RM2.50 and RM2.00 each on 1 February 2019. The retained profit of Tiktok Bhd stood at RM35 million on this date. On 1 March 2019, Vella Bhd disposed another 10 million ordinary shares in Tiktok Bhd at RM1.95 each. The accounting period of the two companies ends at 30 June. On the average, Tiktok Bhd registered RM1 million profits each month for the accounting year ending 30 June 2019. Required: a. Discuss the related consolidation issues when Vella Bhd prepared its Consolidated Profit or Loss and Other Comprehensive Income for 2019. (10 marks) b. Ascertain the profit/loss on disposal of shares on both dates for the group only. (5 marks)
Expert Answer:
Answer rating: 100% (QA)
a amortized cost model when there is only fixed income and Fixed maturity value b Fair value thr... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
Students also viewed these accounting questions
-
Statement of profit or loss and other comprehensive income Year ended 31 Nine-month Dec-18 period ended 31 Dec-17 Revenue 2,200,228 1,561,138 Cost of sales -1,199,154 -877,354 Gross profit 1,001,074...
-
On 1 January 2010 an office issued a number of annual premium policies to a group of lives, each of whom was then aged exactly 45. All policies were for a term of 20 years and were of the following...
-
Companies are required to transfer other comprehensive income each period to shareholders' equity. The FASB Accounting Standards Codification represents the single source of authoritative U.S....
-
Consider a long cylindrical solenoid with diameter R, number of current loops N and length L through which a current I runs. Now (a) Use Ampre's law to calculate the magnetic field inside the...
-
Should a use case be prepared for every item on the event-response list? Why or why not?
-
Discuss the distinction between centralized and decentralized conceptual database design.
-
What is the difference between independence in fact and independence in appearance? State two activities that may not affect independence in fact but are likely to affect independence in appearance.
-
Peter Henning Tool Companys December 31 year-end financial statements contained the following errors. An insurance premium of $66,000 was prepaid in 2014 covering the years 2014, 2015, and 2016. The...
-
Find the vertical asymptotes (if any) of the graph of the function. (Use {7 as an arbitrary integer if necessary. If an answer does not exist, enter DNE.) 2 f(x)=2 x +6X7 ( (smaller value) it 1...
-
The following salaried employees of Mountain Stone Brewery in Fort Collins, Colorado, are paid semimonthly. Some employees have union dues or garnishments deducted from their pay. Required: Calculate...
-
A small accounting firm is looking at leasing a suite that contains 7,000 usable SF in an 80,000 Gross SF office building. The office building has 10,000 SF of unrentable space including mechanicals...
-
In May, your bank receives a request from a large company to borrow RM80 million for three months from August. Your bank has agreed to lend the money at KLIBOR plus 0.50%. However, your bank is...
-
Let f(x) = 4-5x+8x2. Calculate the following values: f(a) = f(a + h) = f(a + h) - f(a) h = for h 0
-
Q.1(a) Write down the definitions of broad monetary aggregates (R, M1, M2 and M3) for Pakistan? What does each component of these monetary aggregates represent? (b) Collect annual data on each of the...
-
If you require a 25% return, what is maximum you should pay for the following investment? You buy a vending machine that will pay you the following cash flows: Year 1:$500 Year 2:$1,000 Year 3:$1,500...
-
1 3 months ago you purchased 3 0 0 shares of a stock for $ 3 0 per share the stock paid you . 7 7 per share in dividends each quarter Today you sell your shares for $ 3 6 per share if you are in the...
-
Brian recently conducted a risk mitigation exercise and has determined the level of risk that remains after implementing a series of controls. Which term best describes this risk? A Control risk Risk
-
You deposit $10,000 in a savings account that earns 7.5% simple interest per year. What is the minimum number of years you must wait to double your balance? Suppose instead that you deposit the...
-
Access the 2011consolidated financial statements for Barrick Gold Corporation by going to investor relations section of the company's website. Answer the questions below. For each question, indicate...
-
Manitoba Exporters Inc. (MEI) sells Inuit carvings to countries throughout the world. On December 1, Year 5, MEI sold 10,000 carvings to a wholesaler in a foreign country at a total cost of 600,000...
-
The balance sheets of X Ltd. and Y Ltd. on December 30, Year 7, are as follows: On December 31, Year 7, X issued 150 common shares for all 60 outstanding common shares of Y. The fair value of each of...
-
Examine the cash flow measures in requirement 2 of the review problem in this chapter. Discuss the meaning of these ratios. Computing Cash Flows from Operating Activities: Indirect Method
-
During 20x7, Arizona Company issued $500,000 in long-term bonds at 96, repaid $75,000 of bonds at face value, paid interest of $40,000, and paid dividends of $25,000. Prepare the cash flows from the...
-
Lower of Cost and Net Realizable Value} Meredith's Appliance Store has the following data for the items in its inventory at the end of the accounting period: \section*{Required:} 1. Compute the...
Study smarter with the SolutionInn App