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Posted on Sep 16, 2024

316 Financial Accounting and Reporting Application Exercises 1 A new company named Promod is formed to acquire all the assets of PO and MO. The

316 Financial Accounting and Reporting Application Exercises 1 A new company named Promod is formed to acquire all the assets of PO and MO. The authorised share capital of the new company is made up of 3,000,000 ordinary shares of RM1.50 each and 500,000 7% preference shares of RMI each The consideration transferred was as follows: PO MO (Units) (Units) Ordinary shares in Promod issued at pat value 1.000.000 1.000.000 Preference shares 250,000 The preference shares issued by Promod are to be used to discharge the preference shareholders of MO. Some cash will be retained by PO and MO that are to be used for the liquidation expenses. PO and MO will be liquidated at the following fair value for the assets PO MO (RM) (RM) PPE 500.000 350,000 Motor vehicles 50.000 30.000 Current assets Book value Book value The following is the Statement of Financial Position of PO and MO as at 31 December 2018 PO MO (EM) (RM) Non current assets PPE (cost) 400,000 200,000 Motor vehicles 100,000 75.000 Brand (goodwill 30,000 15,000 Current assets Inventories 80,000 60,000 Trade receivables 60,000 80,000 Bank 80.000 60.000 Total area 750.000 190.000 PO MO (RM) (RM) Shareholders equity Ordinary shares of RM1.50 each 600.000 200.000 10% Preference shares of RMI each 100.000 Retained profits 70.000 160.000 Liabilities Trade payables 0.000 30,000 Total equities and liabilities 750,000 490,000 Chapter 9 Introduction to Gmp Arounts 317 Required: (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare ledger entries to close the books of PO. (e) Propare journal entries to close the books of MO. (d) Prepare the relevant financial statement appropriate to the information provided here. 316 Financial Accounting and Reporting Application Exercises 1 A new company named Promod is formed to acquire all the assets of PO and MO. The authorised share capital of the new company is made up of 3,000,000 ordinary shares of RM1.50 each and 500,000 7% preference shares of RMI each The consideration transferred was as follows: PO MO (Units) (Units) Ordinary shares in Promod issued at pat value 1.000.000 1.000.000 Preference shares 250,000 The preference shares issued by Promod are to be used to discharge the preference shareholders of MO. Some cash will be retained by PO and MO that are to be used for the liquidation expenses. PO and MO will be liquidated at the following fair value for the assets PO MO (RM) (RM) PPE 500.000 350,000 Motor vehicles 50.000 30.000 Current assets Book value Book value The following is the Statement of Financial Position of PO and MO as at 31 December 2018 PO MO (EM) (RM) Non current assets PPE (cost) 400,000 200,000 Motor vehicles 100,000 75.000 Brand (goodwill 30,000 15,000 Current assets Inventories 80,000 60,000 Trade receivables 60,000 80,000 Bank 80.000 60.000 Total area 750.000 190.000 PO MO (RM) (RM) Shareholders equity Ordinary shares of RM1.50 each 600.000 200.000 10% Preference shares of RMI each 100.000 Retained profits 70.000 160.000 Liabilities Trade payables 0.000 30,000 Total equities and liabilities 750,000 490,000 Chapter 9 Introduction to Gmp Arounts 317 Required: (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare ledger entries to close the books of PO. (e) Propare journal entries to close the books of MO. (d) Prepare the relevant financial statement appropriate to the information provided here