Application Exercises 1 PO 1.000 PO (RM) A new company named Promod is formed to acquire all the assol PO and MO. The auth share capital of the new company is made up of Dondinary Whares of MI SO and 600.000 7% preference shares of HMI each The consideration transferred was as follows: (Units) 1.000.000 Ordinary shares in Promod issued at par value 250.000 Preference shares The preference shures issued by Promod are to be used to discharge the preference shareholders or MIO. Some casti 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 MO (RM) 500.000 350.000 PPE 50.000 30.000 Motor vehicles 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 (RM) (RM) Non-current asset PPE (cost) 100.000 200,000 Motor vehicles 100,000 75,000 Brand (goodwill 30.000 15,000 Current assets Inventories 50.000 60.000 Trade receivables 60,000 80,000 Bank 80,000 60,000 Total assets 750,000 490,000 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 80,000 30.000 Total equities and liabilities 490,000 750,000 Required: (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare ledger entries to close the books of PO. (c) Prepare journal entries to close the books of MO. (d) Prepare the relevant financial statement appropriate to the information provided here. 1 A new company named Promod is formed to acquire all the amets of PO and MO. The authorized share capital of the new company is made up of 5.000.000 ordinary shares of RMI.SO each and 500,000 7 preference shares of RM1 cach The consideration transferred was as follow PO (Units) (Units) Ordinary shares in Promod ud at par value 1,000,000 1.000.000 Preference shares 250.000 The preference sharesised 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 nex PO MO (RM) (RM) PPE 500,000 350,000 Motor vehicles 50,000 30000 Current assets Book value Book value The following the Statement of Pinancial Position of PO and MO us at 31 December 2016 PO MO (RM) (RM) Now-cart PPE (cost) 400,000 200,000 Motor vehicles 100,000 75.000 Brand (goodwill) 30,000 15.000 Current asset Inventories 80200 60,000 Trade receivable 60.000 80.000 Bank 10.000 Total 750,000 490,000 MO CRM) (RM) Shareholder'equity Ordinary shares of RM1.50 each 600.000 200,000 10% Preference shares of RMi ench 100,000 Retained probate 70,000 160,000 Liabilities Traide payable 80,000 30,000 Total equities and liabilities 750,000 490,000 PO Required (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare lediger entries to close the books of PO. (e) Prepare journal entries to close the book of MO. (a) Prepare the relevant financial statement appropriate to the information provided here. Application Exercises 1 PO 1.000 PO (RM) A new company named Promod is formed to acquire all the assol PO and MO. The auth share capital of the new company is made up of Dondinary Whares of MI SO and 600.000 7% preference shares of HMI each The consideration transferred was as follows: (Units) 1.000.000 Ordinary shares in Promod issued at par value 250.000 Preference shares The preference shures issued by Promod are to be used to discharge the preference shareholders or MIO. Some casti 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 MO (RM) 500.000 350.000 PPE 50.000 30.000 Motor vehicles 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 (RM) (RM) Non-current asset PPE (cost) 100.000 200,000 Motor vehicles 100,000 75,000 Brand (goodwill 30.000 15,000 Current assets Inventories 50.000 60.000 Trade receivables 60,000 80,000 Bank 80,000 60,000 Total assets 750,000 490,000 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 80,000 30.000 Total equities and liabilities 490,000 750,000 Required: (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare ledger entries to close the books of PO. (c) Prepare journal entries to close the books of MO. (d) Prepare the relevant financial statement appropriate to the information provided here. 1 A new company named Promod is formed to acquire all the amets of PO and MO. The authorized share capital of the new company is made up of 5.000.000 ordinary shares of RMI.SO each and 500,000 7 preference shares of RM1 cach The consideration transferred was as follow PO (Units) (Units) Ordinary shares in Promod ud at par value 1,000,000 1.000.000 Preference shares 250.000 The preference sharesised 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 nex PO MO (RM) (RM) PPE 500,000 350,000 Motor vehicles 50,000 30000 Current assets Book value Book value The following the Statement of Pinancial Position of PO and MO us at 31 December 2016 PO MO (RM) (RM) Now-cart PPE (cost) 400,000 200,000 Motor vehicles 100,000 75.000 Brand (goodwill) 30,000 15.000 Current asset Inventories 80200 60,000 Trade receivable 60.000 80.000 Bank 10.000 Total 750,000 490,000 MO CRM) (RM) Shareholder'equity Ordinary shares of RM1.50 each 600.000 200,000 10% Preference shares of RMi ench 100,000 Retained probate 70,000 160,000 Liabilities Traide payable 80,000 30,000 Total equities and liabilities 750,000 490,000 PO Required (a) Calculate any goodwill or bargain purchase that took place. (b) Prepare lediger entries to close the books of PO. (e) Prepare journal entries to close the book of MO. (a) Prepare the relevant financial statement appropriate to the information provided here