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Chempaka Holdings Bhd is a beauty and skincare company that was established on 1 January 2005 in Alor Setar, Kedah. After 10 years of operation in Kedah, members of the board of directors of the company has agreed to expand its business to Penang by acquiring a stake in Matahari Bhd, a company established in 2012. On the 1 January 2015, Chempaka Holding Bhd acquired 80 % stake in Matahari Bhd. At the acquisition date, net assets of Matahari Bhd were represented by its share capital of RM100,000 and retained earnings of RM100,000. The market price of Matahari's shares on that date was RM 1.50. Chempaka Holding Bhd also paid RM45,000 to Atan &Tin Associate for the services rendered in relation to the acquisition. The excess payment is for goodwill. It has be decided that policy for Chempaka Group as follows: (i) measure non-controlling interest on acquisition date at fair value of the net identifiable assets of the subsidiary; (ii) depreciate property, plant and equipment (PPE) using the straight line method and to provide a full year's depreciation if the asset has been used for more than 6 months in the year, (ii) account its investment property using the fair value model; and (iv) account its property, plant and investment using the cost model. Given below are the financial statements of Chempaka Holding Bhd and its subsidiary for the year ended 31 December 2015. Penyata pendapatan komprehensif bagi tahun berakhir 31 Disember 2015 Statements of comprehensive income for the year ended 31 December 2015 Chempaka Matahari Holding Bhd Bhd RM'000 RM'000 Jualan / Sales 1,800 1,500 (-) Kos Jualan / Cost of sales 800 700 Untung Kasar / Gross profit 1,000 800 Tolak / Less: Perbelanjaan Jualan/ Selling expenses 360 270 Perbelanjaan Pentadbiran / Administrative expenses 250 320 Lain-lain perbelanjaan / Other expenses 140 110 Untung sebelum cukai / Profit before tax 250 100 (-) Cukai / Tax 80 30 Untung selepas cukai / Profit after tax 170 70 Matahari Bhd RM'000 150 100 (80) Penyata kedudukan kewangan as at 31 Disember 2015 Statements of financial position pada 31 December 2015 Chempaka Holding Bhd RM000 Tanah / Land 500 Mesin pada harga kos / Machinery at cost 400 Susutnilai terkumpul / Accumulated depreciation (100) Pelaburan di dalam Matahari Bhd / Investment in Matahari Bhd 200 Inventori / Inventory 200 Akaun belum terima / Account receivables 120 Bank / Bank 280 1600 Saham biasa pada RM1 setiap satu / Ordinary shares of RM1 each 700 Perolehan tertahan / Retained earnings 260 Akaun belum bayar / Account payables Overdraf / Overdarft 200 1600 100 100 30 400 100 220 80 440 400 Penyata perubahan di dalam ekuiti (sebahagian) bagi tahun berakhir 31 Disember 2015 Statement of changes in equity (partial) for the year ended 31 December 2015 Chempaka Matahari Holding Bhd Bhd RM'000 RM'000 Perolehan tertahan awal/Beginning retained earnings 160 150 (+) Untung tahun semasa / Profit for the year 170 70 (-) Dividen / Dividend 70 Perolehan tertahan akhir / Ending retained earnings 260 220 in February 2015, Chempaka Holding Bhd sold a piece of land (carried in its book al RM150,000) to Matahari Bhd at cost. Dado 30 Otober 2015 nama di Dubai On 30 October 2015, Chempaka Holding Bhd sold a piece of machinery to Matahari Bhd for RM70,000. The machinery was bought by Chempaka Holding Bhd for RM100,000 on 1 January 2012 and its accumulated depreciation on 31 December 2015 was RM40,000. The market value of the machinery at this date is approximately equal to the book value carried in the books of Chempaka Holding Bhd. Matahari Bhd has sold goods to Chempaka Holding Bhd at cost plus 25%. In 2015, the intragroup sales was RM100,000. Chempaka Holding Bhd's opening inventory and ending inventory for 2015 were RM22,000 and RM33,000 respectively (all these goods were bought from Matahari Bhd). As at 31 December 2015, Chempaka Holding's account payables includes an amount of RM10,000 payable to Matahari Bhd for the goods purchased. On 1 January 2015, Chempaka Holding Bhd purchased a building in Penang from KD Bhd for RM900,000, with an agreement that RM180,000 will be paid annually to KD Bhd for 5 years. The building purchased is a three storey building which was rented to Matahari Bhd for 5 years for its distribution and retailing activities. The economic life of the building was estimated at 30 years. Matahari Bhd has paid monthly rental amounting to RM 60,000 starting 1 April 2015. All these transactions have not been recorded by Chempaka Holding Bhd's accountant because he was uncertain whether the investment should be categorised as investment property in accordance with MFRS140 or property, plant and equipment in accordance with MFRS116. e) Andaikan kadar cukai pendapatan ialah 25%. Assume income tax rate is 25%. h Based on the above information, prepare the () Consolidated statement of comprehensive income, (ii) Consolidated statement of financial position, and (iii) Consolidated statement of changes in equity (group retained earnings only) for Chempaka Holding Bhd and its subsidiary for the year ended 31 December 2015. Show all relevant workings. (30 markah/ marks) Chempaka Holdings Bhd is a beauty and skincare company that was established on 1 January 2005 in Alor Setar, Kedah. After 10 years of operation in Kedah, members of the board of directors of the company has agreed to expand its business to Penang by acquiring a stake in Matahari Bhd, a company established in 2012. On the 1 January 2015, Chempaka Holding Bhd acquired 80 % stake in Matahari Bhd. At the acquisition date, net assets of Matahari Bhd were represented by its share capital of RM100,000 and retained earnings of RM100,000. The market price of Matahari's shares on that date was RM 1.50. Chempaka Holding Bhd also paid RM45,000 to Atan &Tin Associate for the services rendered in relation to the acquisition. The excess payment is for goodwill. It has be decided that policy for Chempaka Group as follows: (i) measure non-controlling interest on acquisition date at fair value of the net identifiable assets of the subsidiary; (ii) depreciate property, plant and equipment (PPE) using the straight line method and to provide a full year's depreciation if the asset has been used for more than 6 months in the year, (ii) account its investment property using the fair value model; and (iv) account its property, plant and investment using the cost model. Given below are the financial statements of Chempaka Holding Bhd and its subsidiary for the year ended 31 December 2015. Penyata pendapatan komprehensif bagi tahun berakhir 31 Disember 2015 Statements of comprehensive income for the year ended 31 December 2015 Chempaka Matahari Holding Bhd Bhd RM'000 RM'000 Jualan / Sales 1,800 1,500 (-) Kos Jualan / Cost of sales 800 700 Untung Kasar / Gross profit 1,000 800 Tolak / Less: Perbelanjaan Jualan/ Selling expenses 360 270 Perbelanjaan Pentadbiran / Administrative expenses 250 320 Lain-lain perbelanjaan / Other expenses 140 110 Untung sebelum cukai / Profit before tax 250 100 (-) Cukai / Tax 80 30 Untung selepas cukai / Profit after tax 170 70 Matahari Bhd RM'000 150 100 (80) Penyata kedudukan kewangan as at 31 Disember 2015 Statements of financial position pada 31 December 2015 Chempaka Holding Bhd RM000 Tanah / Land 500 Mesin pada harga kos / Machinery at cost 400 Susutnilai terkumpul / Accumulated depreciation (100) Pelaburan di dalam Matahari Bhd / Investment in Matahari Bhd 200 Inventori / Inventory 200 Akaun belum terima / Account receivables 120 Bank / Bank 280 1600 Saham biasa pada RM1 setiap satu / Ordinary shares of RM1 each 700 Perolehan tertahan / Retained earnings 260 Akaun belum bayar / Account payables Overdraf / Overdarft 200 1600 100 100 30 400 100 220 80 440 400 Penyata perubahan di dalam ekuiti (sebahagian) bagi tahun berakhir 31 Disember 2015 Statement of changes in equity (partial) for the year ended 31 December 2015 Chempaka Matahari Holding Bhd Bhd RM'000 RM'000 Perolehan tertahan awal/Beginning retained earnings 160 150 (+) Untung tahun semasa / Profit for the year 170 70 (-) Dividen / Dividend 70 Perolehan tertahan akhir / Ending retained earnings 260 220 in February 2015, Chempaka Holding Bhd sold a piece of land (carried in its book al RM150,000) to Matahari Bhd at cost. Dado 30 Otober 2015 nama di Dubai On 30 October 2015, Chempaka Holding Bhd sold a piece of machinery to Matahari Bhd for RM70,000. The machinery was bought by Chempaka Holding Bhd for RM100,000 on 1 January 2012 and its accumulated depreciation on 31 December 2015 was RM40,000. The market value of the machinery at this date is approximately equal to the book value carried in the books of Chempaka Holding Bhd. Matahari Bhd has sold goods to Chempaka Holding Bhd at cost plus 25%. In 2015, the intragroup sales was RM100,000. Chempaka Holding Bhd's opening inventory and ending inventory for 2015 were RM22,000 and RM33,000 respectively (all these goods were bought from Matahari Bhd). As at 31 December 2015, Chempaka Holding's account payables includes an amount of RM10,000 payable to Matahari Bhd for the goods purchased. On 1 January 2015, Chempaka Holding Bhd purchased a building in Penang from KD Bhd for RM900,000, with an agreement that RM180,000 will be paid annually to KD Bhd for 5 years. The building purchased is a three storey building which was rented to Matahari Bhd for 5 years for its distribution and retailing activities. The economic life of the building was estimated at 30 years. Matahari Bhd has paid monthly rental amounting to RM 60,000 starting 1 April 2015. All these transactions have not been recorded by Chempaka Holding Bhd's accountant because he was uncertain whether the investment should be categorised as investment property in accordance with MFRS140 or property, plant and equipment in accordance with MFRS116. e) Andaikan kadar cukai pendapatan ialah 25%. Assume income tax rate is 25%. h Based on the above information, prepare the () Consolidated statement of comprehensive income, (ii) Consolidated statement of financial position, and (iii) Consolidated statement of changes in equity (group retained earnings only) for Chempaka Holding Bhd and its subsidiary for the year ended 31 December 2015. Show all relevant workings. (30 markah/ marks)