CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Answer ALL questions in the answer booklet provided. Question 1 Given below are the Statements of Profit and Loss of Amal Bhd and Jojo Bhd for the year ended 31 March 2018: Statement of Profit and Loss for the year ended 31 March 2018 Amal Bhd Jojo Bhd RM'000 RM'000 Turnover 4,000 3,000 Cost of sales (1,500) (1,000) Gross profit 2,500 2,000 Selling expenses (200) (500) Administrative expenses (300) (500) Profit before taxation 2,000 1,000 Taxation (600) (300) Profit for the year 1,400 700 Retained profit b/d 700 400 Ordinary dividends proposed on 15 March 2018: 100 100Additional information: 1. The paid-up capital of Jojo Bhd is made up of 5,000,000 ordinary shares. 2. Amal Bhd bought 80% of the issued share capital of Jojo Bhd on 1 April 2015 when the retained profit of Amal Bhd was RM100,000. 3. On that date, a building of Jojo Bhd was revalued to RM2,000,000 and the carrying amount was RM1,500,000. The remaining useful life was 40 years. Jojo Bhd did not incorporate the fair value in its accounts. Straight-line method of depreciation is used. 4. During the year, Jojo Bhd sold inventory costing RM500,000 for RM600,000 to Amal Bhd. Fifty percent (1/2) of the inventory remains unsold. 5. Amal Bhd deals in furniture and sold inventory costing RM100,000 for RM150,000 to Jojo Bhd this year. Jojo Bhd treats this inventory as a non-current asset. The useful life of the furniture is ten years. This sale is included in the turnover of Amal Bhd for the year. 6. Amal Bhd has not recognized its share dividends from Jojo Bhd. 7. The depreciation charge for buildings and furniture is included in the administrative expenses. 8. Goodwill on consolidation of RM80,000 is impaired by 31 March 2017 and a further RM40,000 was impaired as at 31 March 2018. The group recognizes non-controlling interest on the of acquisition at fair value.You are required to: a. prepare the Consolidated Statement of Profit or Loss for the year ended 31 March 2018. (14 marks) b. determine the composition of group retained profit as at 1 April 2017 and 31 March 2018. (5 marks) Question 2 On 1 January 20x1, Aman Bhd. acquired 75% of the ordinary shares of Damai Ltd. For RM6,500,000. Aman Bhd. functional and presentation currency is the in RM. The currency for Damai Lid.is the Thai Bhat (TB). On the date of acquisition, the equity of Damai Lid. Comprises ordinary shares of T$50,000,000 and retained profit of TB20,000,000. The carrying amount of the net assets reflects fairly the fair values of the assets except for one building which has a fair value exceeding it carrying amount by TB500,000. The exchange rate for year 20x1 are RM 1= TB 1 January 20x1 8.60 31 December 20x1 8.65 Average rate 8.63 You are required to: a. give three condition when the functional currency of Damai Ltd. is Ringgit Malaysia (RM). (3 marks) b. determine the goodwill on acquisition of Damai Ltd. (7 marks)
