hey could u please help us to solve this consolidated question ?
On 1 July x2, H plc acquired 80% of the ordinary share capital of S plc at a cost of RM10,280,000. On the same date, it also acquired 50% of S's 10% loan notes at par. The summarized draft financial statements of both companies are as follows: Statement of Profit or Loss for the year to 31 march x3 H plc S plc RM'000 RM'000 Revenue 60,000 24,000 Cost of sales -42,000 -20,000 Gross profit 18,000 4,000 Operating expenses -6,000 200 Loan interest received/(paid) 75 -200 Operating profit 12,075 3,600 Tax -3,000 -600 PAT 9,075 3,000 Statement of Financial Position as at 31 March x3 Hill Skip RM'000 RM'000 Non-current assets 19,320 8,000 Investments 11,280 NIL Current assets 15,000 8,000 45,600 16,00010 million ordinary shares 10,000 2 million ordinary shares 2,000 Retained profit b/f 16,525 5,400 Profit for the year 9,075 3,000 Non current liabilities - 10% loan notes NIL 2,000 Current liabilities 10,000 3,600 45,600 16,000 The following information is relevant: a. The fair value of S plc's assets were equal to their carrying amount with the exception of its plant, which had a fair value of RM3.2 million in excess of its carrying amount at the date of acquisition. The remaining life of S plc's plant at the date of its acquisition was 4 years and this period has not changed as a result of the acquisition. Depreciation of the plant is on a straight line basis and charged to cost of sales. S plc has not adjusted the value of its plant as a result of the fair value exercise. b. In the post-acquisition period, H plc sold goods to S plc at a price of RM6 million. These goods had cost H plc RM4.5 million. During the year, S plc had sold RM5 million (at cost to S plc) of these goods for RM7.5 million. c. H plc bears almost all of the administrative cost incurred on behalf of the group (involving, credit control, etc.). It does not charge S plc for this services as to do so would not have a material effect on the group's profit. d. Revenues and profits should be deemed to accrue evenly throughout the year. e. The current account of the two companies were reconciled and S plc owed H plc RM750,000.The following information is relevant: a. The fair value of S plc's assets were equal to their carrying amount with the exception of its plant, which had a fair value of RM3.2 million in excess of its carrying amount at the date of acquisition. The remaining life of S plc's plant at the date of its acquisition was 4 years and this period has not changed as a result of the acquisition. Depreciation of the plant is on a straight line basis and charged to cost of sales. S plc has not adjusted the value of its plant as a result of the fair value exercise. b. In the post-acquisition period, H plc sold goods to S plc at a price of RM6 million. These goods had cost H plc RM4.5 million. During the year, S plc had sold RM5 million (at cost to S plc) of these goods for RM7.5 million. c. H plc bears almost all of the administrative cost incurred on behalf of the group (invoiving, credit control, etc.). It does not charge S plc for this services as to do so would not have a material effect on the group's profit. d. Revenues and profits should be deemed to accrue evenly throughout the year. e. The current account of the two companies were reconciled and S plc owed H plc RM750,000. Required: (i) Prepare the consolidated profit or loss statement for the year 31 March x3. (17 marks) (ii) Calculate the goodwill value at the date of acquisition using Method 2. (8 marks) (Total 25 marks)
