Question 1 a) You are presented with the summarized information for Maxim Bhd and its subsidiary, Profile Sdn Bhd for the year ended 30 September 2019. Statements of financial position at 30 September 2019 Profile Sdn Bhd RM 000 RM'000 Maxim Bhd Non-current assets Property, plant and equipment Investments: shares in group company 440 1,280 500 1.780 440 Current assets Inventories Receivables Cash and cash equivalents Total Current Assets Total assets 300 200 40 540 2.320 250 50 30 430 870 Equity Equity share capital (RMI shares) Retained earnings 900 720 1.620 400 220 620 Current liabilities Trade payables Other creditors Provisions for liabilities and charges Total equity and liabilities 80 160 240 460 700 2.320 160 70 230 20 250 870 Additional information: (1) Maxim Bhd acquired 320,000 shares in Profile Sdn Bhd on 1 October 2016 when Profile Sdn Bhd's retained earnings were RM40,000. (i) At this date, the fair values of Profile Sdn Bhd 's property, plant and equipment were agreed as RM150,000 greater than their book values. These values were not incorporated into Profile Sdn Bhds books. Profile Sdn Bhd has a 10% straight-line depreciation policy. (iii) Profile Sdn Bhd has sold goods to Maxim Bhd during the year for RM50,000, which included a 25% mark-up on cost. At the year-end one-fifth of these inventories are still held by Maxim Bhd. (iv) The review for impairment of goodwill arising on acquisition made at 30 September 2019 revealed that there was an impairment loss of RM8,000. There had been no previous impairment loss. (v) Retained earnings at 30 September 2018 for Maxim Bhd and Profile Sdn Bhd were RM320,000 and RM90,000 respectively. (vi) Dividends paid by the companies during the year ended 30 September 2019 were Maxim Bhd RM90,000 and Profile Sdn Bhd 50,000. Required: Prepare Maxim Bhd's consolidated statement of financial position at 30 September 2019. (24 Marks) (b) Mark Sdn Bhd is developing a new production process. During 2019, expenditure incurred was RM100,000, of which RM90,000 was incurred before 1 December 2019 and RM10,000 between 1 December 2019 and 31 December 2019. Mark Sdn Bhd can demonstrate that, at 1 December 2019, the production process met the criteria for recognition as an intangible asset. The recoverable amount of the know-how embodied in the process is estimated to be RM50,000. Required How should the expenditure be treated? (3 Marks) (6) An intangible asset is measured by a company at fair value. The asset was revalued by $400 in 20X3, and there is a revaluation surplus of $400 in the statement of financial position. At the end of 20X4, the asset is valued again, and a downward valuation of $500 is required. Required: State the accounting treatment for the downward revaluation. (3 Marks) (Total: 30 marks)