Answered step by step
Verified Expert Solution
Question
1 Approved Answer
2 . Included within the financial assets of Leper Bhd at 30 September 2021 are the following two recently purchased investment in publicly-traded equity shares:
2 . Included within the financial assets of Leper Bhd at 30 September 2021 are the following two recently purchased investment in publicly-traded equity shares: Investment in SFERA Leper Bhd purchased 10 million equity shares in SFERA at RM3 per share. Leper Bhd incurred a transaction cost of RM2 million. These shares were acquired for speculative purposes and Leper Bhd expects to sell these shares in the near future. At 30 September 2021, the shares in SFERA were trading at RM2.50. Investment in KUBUS Leper Bhd purchased 10 million equity shares in KUBUS at a price of RM5 per share. Transaction costs were RM3 million. This shareholding of 10% was acquired as a long- term investment as Leper Bhd wishes to participate as an active shareholder in KUBUS Bhd. At 30 September 2021, the shares in KUBUS were trading at RM6.50. On 30 June 2021, Leper Bhd received a dividend from KUBUS of 20 sen per share. Required: (a) Explain how the investments in SFERA and KUBUS should be dealt with. (8 marks) (b) Prepare extract of the financial statements at 30 September 2021 with regards to investments in SFERA and KUBUS. (16 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started