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On 1 January 2 0 2 0 , Raqib Construction Bhd . ( RCB ) acquired a 9 0 % ownership interest in Cider Construction
On January Raqib Construction BhdRCB acquired a ownership interest in Cider Construction Sdn Bhd CCSB for RM On the same date, RCB also acquired of Gary Construction Sdn Bhd GCSB for RM The net assets on the date of purchase and yearend for both CCSB and GCSB were as follows: tableCCSBGCSB Investment at a cost: Subsidiaries Quoted Shares Other Assets Additional information: The shareholders funds are assumed to be representative of the fair values of the identifiable assets of CCSB and GCSB at the date of acquisitions. It is the group policy to allocate goodwill to NonControlling Interest NCI and there was no impairment of goodwill for the current year. During the year RCB bought merchandise from GCSB for RM The yearend inventory of RCB included RM purchased from GCSB The inventory cost to GCSB was RM RCB would like to write down their Investment in Quoted shares by RM citing a reduction in value as the reason. Required: a State which MFRS you will use in accounting for the Investment in Quoted Shares. Write the accounting treatment that you will do for the Investment as per additional information above. marks b Compute the Groups gain or loss on disposal. marks c Calculate the goodwill, pre and postacquisition reserves for the NCI that the group will recognize in the consolidated financial statement. The group policy is to use the full goodwill method. marks d Prepare journal entries to consolidate the Group. Show all your workings. marks e Consolidate the Group as of December using the worksheet form. marks
On January Raqib Construction BhdRCB acquired a ownership interest in Cider Construction Sdn Bhd CCSB for RM On the same date, RCB also acquired of Gary Construction Sdn Bhd GCSB for RM The net assets on the date of purchase and yearend for both CCSB and GCSB were as follows:
tableCCSBGCSB
Investment at a cost:
Subsidiaries
Quoted Shares
Other Assets
Additional information:
The shareholders funds are assumed to be representative of the fair values of the
identifiable assets of CCSB and GCSB at the date of acquisitions. It is the group policy to
allocate goodwill to NonControlling Interest NCI and there was no impairment of
goodwill for the current year.
During the year RCB bought merchandise from GCSB for RM The yearend
inventory of RCB included RM purchased from GCSB The inventory cost to GCSB
was RM
RCB would like to write down their Investment in Quoted shares by RM citing a
reduction in value as the reason.
Required:
a State which MFRS you will use in accounting for the Investment in Quoted Shares. Write
the accounting treatment that you will do for the Investment as per additional
information above.
marks
b Compute the Groups gain or loss on disposal.
marks
c Calculate the goodwill, pre and postacquisition reserves for the NCI that the group will
recognize in the consolidated financial statement. The group policy is to use the full
goodwill method.
marks
d Prepare journal entries to consolidate the Group. Show all your workings.
marks
e Consolidate the Group as of December using the worksheet form.
marks
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