Hello Bhd bought 80% of the share capital of Kitty Bhd for RM1,240,000 on January 1, 2019. At that date Kitty Berhad's retained earnings stood at RM200,000.

The statements of financial position at 31 December 2020, summarised income statements to that date and movement on retained earnings are given below:

STATEMENTS OF FINANCIAL POSITION Non-current assets Property, plant and equipment Investment in Ping Pong Berhad

Current assets

Equity Share capital RM1 ordinary shares Retained earnings

Hello Bhd

Kitty Bhd

RM000 3,200 1,240

4,440

1,890

6,330

1,000

4,020

RM000 1,800 -

1,800

1,040

2,840

800

1,010

5,020

1,310

6,330

780 (140)

640

510

1,150

2,870

1,150

4,020

1,810

Current liabilities

SUMMARISED INCOME STATEMENTS

Profit before interest and tax Income tax expense Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year

MOVEMENT IN RETAINED RESERVES

Balance at 31 December 2019 Total comprehensive income for the year Balance at 31 December 2020

1,030

2,840

520 (80)

440

96

536

474

536

1,010

Hello Bhd sells one half of its holding in Kitty Bhd for RM700,000 on 30 June 2020. At that date, the fair value of the 40% holding in Kitty was slightly more at RM930,000 due to a share price rise. The remaining holding is to be dealt with as an associate. This does not represent a discontinued operation.

No entries have been made in the accounts for the above transaction. Assume that profits accrue evenly throughout the year.

It is the group's policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiary's identifiable net assets.

Required:

(a) Prepare the consolidated statement of financial position for the Hello Group for the year ended 31 December 2020; [10 marks]

(b) Prepare the statement of comprehensive income for the Hello Group for the year ended 31 December 2020; and [15 marks]

Ignore income taxes on the disposal. No impairment losses have been necessary to date.

Question 3 Hello Bhd bought 80% of the share capital of Kitty Bhd for RM1,240,000 on January 1, 2019. At that date Kitty Berhad's retained earnings stood at RM200,000. The statements of financial position at 31 December 2020, summarised income statements to that date and movement on retained earnings are given below: STATEMENTS OF FINANCIAL POSITION Hello Bhd Kitty Bhd RM'000 RM'000 Non-current assets Property, plant and equipment 3,200 1,800 Investment in Ping Pong Berhad 1,240 4,440 1.800 Current assets 1,890 1,040 6,330 2,840 Equity Share capital - RM1 ordinary shares 1,000 800 Retained earnings 4,020 1,010 Current liabilities 5,020 1,310 6,330 1,810 1,030 2,840 SUMMARISED INCOME STATEMENTS Profit before interest and tax Income tax expense Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year 780 (140) 640 510 1,150 520 (80) 440 96 536 MOVEMENT IN RETAINED RESERVES Balance at 31 December 2019 Total comprehensive income for the year Balance at 31 December 2020 2,870 1,150 4,020 474 536 1,010 Hello Bhd sells one half of its holding in Kitty Bhd for RM700,000 on 30 June 2020. At that date, the fair value of the 40% holding in Kitty was slightly more at RM930,000 due to a share price rise. The remaining holding is to be dealt with as an associate. This does not represent a discontinued operation. No entries have been made in the accounts for the above transaction. Assume that profits accrue evenly throughout the year. It is the group's policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiary's identifiable net assets. Required: (a) Prepare the consolidated statement of financial position for the Hello Group for the year ended 31 December 2020; [10 marks) (b) Prepare the statement of comprehensive income for the Hello Group for the year ended 31 December 2020; and [15 marks) Ignore income taxes on the disposal. No impairment losses have been necessary to date