BAC4634 CORPORATE ACCOUNTING I 10 MARCH 2.120 QUESTION Blue Lagoon Bhd engzges in the sport services business. The company planned to diversify the business and therefore acquired 80 percent of the issued ordinary sbare capital of Giant Bubble Ltd on 1 January 2018. Giant Bubble Ltd is located in AU Land and the currency is AU$. The reserve of Giant Bubble Ltd on 1 January 2018 wes AU$2,000,000. Both Blue Lagoon Bhd and Giant Bubble Ltd have financial year end at 31 December anually. The functional currency of Biuc Lagoon Bhd is Ringgit Malaysia while Giant Bubble Ltd is AU Dollar, The statements of financial position as at 31 December 2018 and the statements of profit or loss for the year ended 31 December 2018 for Blue Lagoon Bhd and Giant Bubble Ltd are as follows: Statements of Financial Position as at 31 December 2018 Blue Lagoon Bhd RMOC Property, plant and cquipment 6,000 Development expenditure 1,000 Livestment in Giant Bubble to 2,400 Trade receivables 1,800 Bank 600 11,800 Giant Bubble Ltd ATSOXO 6,000 200 1,000 400 7,600 5,000 3,400 3,000 Ordinary shares Retaired profit 5/6 Profit cor the year Borrowings Trade payables Tax payable 4,000 2,000 800 400 340 300 100 60 11,800 7,600 Continued... ASMN,LYZ 1/7 BAC4634 CORPORATE ACCOUNTING II 10 MARCH 2020 Statements of profit or loss for the year ended 31 December 2018 Blue Lagoon Bhd Giant Bubble Ltd RM1000 RM'000 AUS000 AU$000 Revenue 11,000 4,000 Cost of sales (6,000) (1,600) Gross profit 5,000 2,400 Expenses 1,200 1,000 Depreciation 800 (2,000) 600 (1,600) Net profit 3,000 800 Rates of exchange 1 January 2017 (date on which property, plant and equipment was acquired) 1 January 2018 Average rate for year 31 December 2018 Date closing inventory was purchased Date opening inventory was purchased AUS RM 7 1 6 1 5 1 4 1 6 1 3 1 Required: In compliance with the MFRS 121: The Effects of Changes in Foreign Exchange Rates and using the net investment method: a) Compute the goodwill on consolidation. (5 marks) b) Prepare the Translated and Consolidated Statement of Financial Position as at 31 December 2018. (12 marks) c) Prepare the Translated and Consolidated Statement of Profit or Loss for the year ended 31 December 2018. (8 marks) (Total: 25 marks) BAC4634 CORPORATE ACCOUNTING I 10 MARCH 2.120 QUESTION Blue Lagoon Bhd engzges in the sport services business. The company planned to diversify the business and therefore acquired 80 percent of the issued ordinary sbare capital of Giant Bubble Ltd on 1 January 2018. Giant Bubble Ltd is located in AU Land and the currency is AU$. The reserve of Giant Bubble Ltd on 1 January 2018 wes AU$2,000,000. Both Blue Lagoon Bhd and Giant Bubble Ltd have financial year end at 31 December anually. The functional currency of Biuc Lagoon Bhd is Ringgit Malaysia while Giant Bubble Ltd is AU Dollar, The statements of financial position as at 31 December 2018 and the statements of profit or loss for the year ended 31 December 2018 for Blue Lagoon Bhd and Giant Bubble Ltd are as follows: Statements of Financial Position as at 31 December 2018 Blue Lagoon Bhd RMOC Property, plant and cquipment 6,000 Development expenditure 1,000 Livestment in Giant Bubble to 2,400 Trade receivables 1,800 Bank 600 11,800 Giant Bubble Ltd ATSOXO 6,000 200 1,000 400 7,600 5,000 3,400 3,000 Ordinary shares Retaired profit 5/6 Profit cor the year Borrowings Trade payables Tax payable 4,000 2,000 800 400 340 300 100 60 11,800 7,600 Continued... ASMN,LYZ 1/7 BAC4634 CORPORATE ACCOUNTING II 10 MARCH 2020 Statements of profit or loss for the year ended 31 December 2018 Blue Lagoon Bhd Giant Bubble Ltd RM1000 RM'000 AUS000 AU$000 Revenue 11,000 4,000 Cost of sales (6,000) (1,600) Gross profit 5,000 2,400 Expenses 1,200 1,000 Depreciation 800 (2,000) 600 (1,600) Net profit 3,000 800 Rates of exchange 1 January 2017 (date on which property, plant and equipment was acquired) 1 January 2018 Average rate for year 31 December 2018 Date closing inventory was purchased Date opening inventory was purchased AUS RM 7 1 6 1 5 1 4 1 6 1 3 1 Required: In compliance with the MFRS 121: The Effects of Changes in Foreign Exchange Rates and using the net investment method: a) Compute the goodwill on consolidation. (5 marks) b) Prepare the Translated and Consolidated Statement of Financial Position as at 31 December 2018. (12 marks) c) Prepare the Translated and Consolidated Statement of Profit or Loss for the year ended 31 December 2018. (8 marks) (Total: 25 marks)