ASSIGNMENT QUESTION QUESTION On 1 July 20x2, Campbell Bhd acquired 75 percent of the issued ordinary share capital of Bell Bhd while the retained profit of Bell had a debit balance of RM200,000. The fair value of the land in Bell at that time was RM300,000 more than its carrying amount. Campbell Bhd acquired 60 percent of the issued ordinary share capital of Simpson Bhd on 1 January 20x5 while the retained profit was RM400,000. Simpson has an unrecognised homegrown brand which fair value is RM150,000. This asset has an indefinite life. The cost of this business combination was to be discharged by a cash payment of RM200,000 and an issue of RM800,000 fair value of new ordinary shares in Campbell. Campbell has only recorded the cash paid. The Statements of Financial Position of the three entities as at 31 December 20x5 are as follows: Campbell Bell Simpson RM'000 RM'000 RM'000 ASSETS Non-Current Assets Land 500 390 300 Property, plant and equipment 3,230 500 Investments: Shares in Bell 2,000 Shares in Simpson 200 593 194 80 1,550 Current Assets Trade receivables Inventories Bank 250 300 700 400 1.100 2.200 8.130 450 600 400 1.450 3.390 200 750 1.550 TOTAL ASSETS EQUITY AND LIABILITIES Ordinary share capital Retained profit Total Equity 7000 750 7.750 2500 600 1200 300 1,500 3,100 Current Liabilities Trade payables Proposed dividends 100 280 380 8.130 150 140 290 3.390 'I TOTAL EQUITY AND LIABILITIES 1.550 The following information is relevant: a. The fair values of Bell's land increased by another RM400,000 by the end of year 20x5. b. c. In 20x3, Bell sold a piece of land costing RM50,000 for RM100,000 to Simpson. The land is still with Simpson. In year 20x5, Campbell sold to Bell a plant with a carrying amount of RM400,000 for RM800,000. The plant has a remaining economic life of four years. All the of Campbell and one-half of the inventories of Bell were bought from Simpson. Simpson sold the goods at a gross margin of 25 percent. Campbell has not recognised its share of dividends from Bell. Included in the trade payables of Bell is RM100,000 due to Campbell. d. e. f. Required: a. Prepare the consolidation journal entries for the year ended 31 December 205. [13 marks) b. Prepare the consolidated statement of financial position for Campbell Bhd as at 31 December 20x5. [7 marks] [Total: 20 marks] END OF PAGE ASSIGNMENT QUESTION QUESTION On 1 July 20x2, Campbell Bhd acquired 75 percent of the issued ordinary share capital of Bell Bhd while the retained profit of Bell had a debit balance of RM200,000. The fair value of the land in Bell at that time was RM300,000 more than its carrying amount. Campbell Bhd acquired 60 percent of the issued ordinary share capital of Simpson Bhd on 1 January 20x5 while the retained profit was RM400,000. Simpson has an unrecognised homegrown brand which fair value is RM150,000. This asset has an indefinite life. The cost of this business combination was to be discharged by a cash payment of RM200,000 and an issue of RM800,000 fair value of new ordinary shares in Campbell. Campbell has only recorded the cash paid. The Statements of Financial Position of the three entities as at 31 December 20x5 are as follows: Campbell Bell Simpson RM'000 RM'000 RM'000 ASSETS Non-Current Assets Land 500 390 300 Property, plant and equipment 3,230 500 Investments: Shares in Bell 2,000 Shares in Simpson 200 593 194 80 1,550 Current Assets Trade receivables Inventories Bank 250 300 700 400 1.100 2.200 8.130 450 600 400 1.450 3.390 200 750 1.550 TOTAL ASSETS EQUITY AND LIABILITIES Ordinary share capital Retained profit Total Equity 7000 750 7.750 2500 600 1200 300 1,500 3,100 Current Liabilities Trade payables Proposed dividends 100 280 380 8.130 150 140 290 3.390 'I TOTAL EQUITY AND LIABILITIES 1.550 The following information is relevant: a. The fair values of Bell's land increased by another RM400,000 by the end of year 20x5. b. c. In 20x3, Bell sold a piece of land costing RM50,000 for RM100,000 to Simpson. The land is still with Simpson. In year 20x5, Campbell sold to Bell a plant with a carrying amount of RM400,000 for RM800,000. The plant has a remaining economic life of four years. All the of Campbell and one-half of the inventories of Bell were bought from Simpson. Simpson sold the goods at a gross margin of 25 percent. Campbell has not recognised its share of dividends from Bell. Included in the trade payables of Bell is RM100,000 due to Campbell. d. e. f. Required: a. Prepare the consolidation journal entries for the year ended 31 December 205. [13 marks) b. Prepare the consolidated statement of financial position for Campbell Bhd as at 31 December 20x5. [7 marks] [Total: 20 marks] END OF PAGE