Orelle Berhad is a matured company and has many subsidiaries. The Consolidated Statement of Comprehensive Income for the year ended 30 June 2021 for Orelle Berhad is given below:

Included in the administrative and other operating expenses were the depreciation of property, plant and equipment of RM8,400,000 and impairment loss of goodwill on consolidation. Besides, the taxation for the group includes current year taxation of RM9,000,000 and deferred taxation of RM2,000,000.

The Consolidated Statements of Financial Position as at 30 June 2020 and 2021 for Orelle Berhad are as follows:

(2) In addition, included in the receivables account were accrued interest income of RM800,000 and RM1,000,000 in 2021 and 2020 respectively. Besides, accrued interest expense was included in the payables account amounting RM1,200,000 for the year of 2021 and RM1,800,000 for the year of 2020.

(3) Orelle Berhad disposed its marketable securities within 50 days of buying.

(4) Orelle Berhads holdings include a 60% interest in the equity capital of Smurf Berhad. However due to the economic crisis, Orelle Berhad had to retrench its business. Therefore, on 1 July 2020 Orelle Berhad sold all its holdings in Smurf Berhad and received a cash consideration of RM14,400,000. At the date of disposal, balance in purchased goodwill was RM2,000,000 and the net assets of Smurf Berhad as at that date were as follows:

RM000

Property, plant and equipment 8,000

Inventories 8,800

Receivables 6,000

Bank balances 1,200

Debentures (6,000)

Payables (2,000)

Net assets of subsidiary 16,000

REQUIRED:

(a) Prepare the following ledger accounts: (i) Investment in associate. (2 marks) (ii) Non-controlling interest. (3 marks)

(b) Prepare the Consolidated Statement of Cash Flows for the year ended 30 June 2021 in accordance with MFRS107 Statement of Cash Flows, using INDIRECT METHOD for Orelle Berhad. (18 Marks)

(c) Gain on disposal of assets should be excluded in preparation of Consolidated Statement of Cash Flows. However, disclosure on the revaluation of fixed asset is required. Discuss the above statement by referring to MFRS107 Statement of Cash Flows. (7 marks)

Consolidated Statement of Comprehensive Income for the year ended 30 June 2021 Sales Cost of sales Gross profit Selling expenses Administrative and other operating expenses Operating profit Interest income Share of profits of associate company Gain on disposal of a subsidiary - Smurf Berhad Interest expense Profit before tax Taxation Profit after tax RM'000 172,000 (109,200) 62,800 (6,000) (24,000) 32,800 2,000 6,600 2,800 (3,600) 40,600 (11,000) 29,600 Profit after tax attributable to: Equity holders of parent Non-controlling interest 26,000 3,600 29,600 Consolidated Statements of Financial Position as at 30 June 2021 ASSETS RM'000 Property, plant and equipment 50,000 Investment in associate companies 11,600 Goodwill 6,400 68,000 Current assets: Inventories 23,200 Receivables 18,400 Marketable securities 11,200 Cash and bank balances 6,000 Total Assets 126,800 2020 RM'000 56,000 8,600 13,000 77,600 24,400 16,000 8,400 2,800 129,200 EQUITIES AND LIABILITIES Ordinary shares Retained profits Proposed dividends 40,000 33,600 9,600 83,200 4,200 87,400 40,000 17,200 9,000 66,200 10,000 76,200 Non-controlling interest Non-current liabilities: Debentures Deferred taxation 8,000 6,000 20,000 4,000 Current liabilities: Payables Taxation Total Equities and Liabilities 13,800 11,600 126,800 18,600 10,400 129,200 Additional information: (1) The movements of property, plant and equipment during the year were as follows: Balance at 1 July 2020 Additions / charge during the year Disposals Balance at 30 June 2021 Cost Depreciation RM'000 RM'000 87,600 31,600 10,800 8,400 (11,000) (2,600 87,400 37,400 Consolidated Statement of Comprehensive Income for the year ended 30 June 2021 Sales Cost of sales Gross profit Selling expenses Administrative and other operating expenses Operating profit Interest income Share of profits of associate company Gain on disposal of a subsidiary - Smurf Berhad Interest expense Profit before tax Taxation Profit after tax RM'000 172,000 (109,200) 62,800 (6,000) (24,000) 32,800 2,000 6,600 2,800 (3,600) 40,600 (11,000) 29,600 Profit after tax attributable to: Equity holders of parent Non-controlling interest 26,000 3,600 29,600 Consolidated Statements of Financial Position as at 30 June 2021 ASSETS RM'000 Property, plant and equipment 50,000 Investment in associate companies 11,600 Goodwill 6,400 68,000 Current assets: Inventories 23,200 Receivables 18,400 Marketable securities 11,200 Cash and bank balances 6,000 Total Assets 126,800 2020 RM'000 56,000 8,600 13,000 77,600 24,400 16,000 8,400 2,800 129,200 EQUITIES AND LIABILITIES Ordinary shares Retained profits Proposed dividends 40,000 33,600 9,600 83,200 4,200 87,400 40,000 17,200 9,000 66,200 10,000 76,200 Non-controlling interest Non-current liabilities: Debentures Deferred taxation 8,000 6,000 20,000 4,000 Current liabilities: Payables Taxation Total Equities and Liabilities 13,800 11,600 126,800 18,600 10,400 129,200 Additional information: (1) The movements of property, plant and equipment during the year were as follows: Balance at 1 July 2020 Additions / charge during the year Disposals Balance at 30 June 2021 Cost Depreciation RM'000 RM'000 87,600 31,600 10,800 8,400 (11,000) (2,600 87,400 37,400