Consolodation

QUESTION 5 Given below were the draft statements of profit or loss and statements of changes in equity (extracted) for the year ended 31 December 2020 of Balo Bhd and Telli Bhd: Statements of profit or loss for the year ended 31 December 2020 Revenue Cost of sales Gross profit Administrative expenses Gain on sale of machine Debenture interest expense Debenture interest income Profit before taxation Taxation Profit after taxation Balo Bhd RM' OOO 24,500 _(13,000) 11 ,500 (1 ,000) 800 11,300 (3.166) 8 134 Statements of changes in equity for the year ended 31 December 2020 (extract) Retained profit as at 1 January 2020 Profit for the year Dividend paid at 31 December 2020: Ordinary dividend Preference dividend Retained profit as at 31 December 2020 Additional information: Balo Bhd RM' 000 5,120 8,134 (2,000) '1254 Telli Bhd RM'OOO 20,000 AIO.400) 9,600 (1 ,600) 500 (2,000) 6,500 (2.080) 4 420 Telli Bhd RM'OOO 1 ,480 4,420 (600) (200) 5100 Balo Bhd acquired 80% of the ordinary shares and 40% of the 10% Debentures of Telli Bhd on 1 January 2019. On that date, Telli Bhd had the following balances: Ordinary share capital Preference share capital Debentures Retained profit 8 RM'000 20,000 4,000 20,000 800 2. 3. 4. 5. 6. 7. Since 1 January 2020, Telli Bhd consistently sold goods to Balo Bhd amounted to RM250,OOO per month at a profit of 25% on cost. As of 31 December 2020, there was still a six-month supply of these goods in the inventory of Balo Bhd. On 1 September 2020, Telli Bhd sold a machine to Balo Bhd making a profit of RM500,OOO. On that date, the remaining useful life of the machine was 5 years. As at year ended 31 December 2020, the machine was still in the book Of Balo Bhd. Balo Bhd has not yet recorded the dividend income from Telli Bhd. The group depreciated its property plant and equipment on a straight-line basis, providing full year depreciation in the year of purchase and none in the year of disposal. All profits and losses were deemed to accrue evenly throughout the year. The group's policy was to measure the non-controlling interests at the proportionate fair value Of the net assets Of the subsidiary. Required. a. b. Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income of Balo Bhd and its subsidiary Telli Bhd for the year ended 31 December 2020. (Show all workings.) (20 marks) Prepare the Consolidated Statement of Changes in Equity (extract) for the year ended 31 December 2020 showing the retained profit and non-controlling interest column only. (Show all workings.) (10 marks) (Total: 30 marks)