QUESTION 1 (20 MARKS)

On January 1, 2021 Berlian Bhd. acquired 640,000 units of equity shares of Permata Sdn. Bhd. The purchase consideration was in the form of RM800,000 cash and the issuance of 360,000 units of Berlian Bhd equity shares at a market value of RM2.50 per share. The latest Statements of Financial Position of both companies prior to the acquisition date are as follows:

	Berlian Bhd.	Permata Sdn. Bhd.
RM'000	RM'000
Property, plant and equipments:
Property	2,000	800
Plant & equipment	600	400
Current assets	1,400	600
	4,000	1,800
Equity shares, average price RM1.00 per share	2,000	800
Retained earnings	1,200	400
Long-term liabilities	600	400
Current liabilities	200	200
	4,000	1,800

In determining the purchase price, the following information is taken into account by Berlian and Permata:

1. Fair value of Permata's property isRM1,000,000.
2. Fair value of Permata's plant and equipment isRM360,000.
3. Permata owns a trademark worthRM400,000.

Required:

a) Determine the interest of Berlian Bhd in Permata Sdn.Bhd.

(1 mark)

b) Determine the investment cost in Permata Sdn. Bhd. which needs to be recorded by BerlianBhd.

(2 marks)

c) DeterminethefairvalueofthenetassetsofPermataSdn.Bhd.ontheacquisitiondate.

(2 marks)

d) Determine the value of goodwill on the acquisition if the non -controlling interest is measured at full fairvalue.

(4 marks)

e) Determine the value of goodwill on the acquisition if the non -controlling interest is measured at the fair value of the netassets

(3 marks)

f) Determine the value of the non-controlling interest to be reported in the statement of financial position of the Berlian Bhd Group on January 1, 2021 if the non-controlling interest is measured at full fairvalue.

(3 marks)

g) Based on the information in e) above, prepare Consolidated Statement of Financial Position as at 1 January2021.

(5 marks)