Question 1 Apple Bhd started business many years ago as a family owned private limited company. Over the years, it has successfully acquired smaller companies and grown into a multi-national conglomerate. The following are the Statements of Profitor Loss of Apple Bhd and its subsidiaries: Statements of Profit or Loss for the year ended 31 December 2019 Apple RM million 120 -36 84 5 1 -25 Pear RM million 50 -15 35 4 Kiwi RM million 45 -20 25 1 1 -16 -18 Turnover Cost of Sales Gross profits Dividend Income Gain on Disposal of Assets Administrative Expenses Selling & Distribution Expenses Earnings before Interest and Tax Finance Costs Profits before taxation Taxation Net Profits -10 -2 -8 13 -3 -2 55 -3 53 -13 39 10 7 -3 8 -2 5 Apple RM million 62.7 100 Pear RM million 25.8 25 Kiwi RM million 5.2 10 Retained Profits on 1 January 2018 Ordinary shares (issued at RM1 each) Dividend declared and paid on 20.12.2019 3 1.5 1 Additional information: 1. On 1 January 2017, Apple Bhd acquired 75% of Pear Bhd's ordinary shares for RM35 million cash. Pear Bhd's retained earnings stood at RM18 million on this date. 2. On 1 January 2018, Apple Bhd acquired 80% of Kiwi Bhd's ordinary shares for RM13 million. Revaluation of Kiwi Bhd's assets on the acquisition date revealed that a vacant land has increased in value compared to its carrying value by RM1.7 million. Kiwi Bhd has not accounted for the increase its books. 3.On 1 March 2019, Apple Bhd entered into a joint venture business with Banana Bhd to set-up a new business where Apple Bhd has a 50% equity interest. As at 31 December 2019, the business incurred accumulated losses of RM1.6 million 4. Apple Bhd disposed a plant to Pear Bhd on 1 February 2019 and recognised a gain of RM0.4 million. The remaining useful life of plant is five (5) years. 5. During the financial year, Pear Bhd sold inventories to Apple Bhd as follows: Date of sale Selling Price Note (RM Million) 20 March 2019 3 Apple Bhd has sold all the goods 15 July 2019 4 Apple Bhd still kept 20% of the inventory 10 November 2019 2 Apple Bhd managed to sell 50% of the inventory The group policy is to earn 10% profits on the selling price. 6. At the end of 2019, goodwill from the acquisition of Pear Bhd should be impaired by RM0.3 million 9. The parent company have received dividends from their respective subsidiary. 10. Apple Bhd value non-controlling interest using the partial goodwill method. Required: The Consolidated Statement of Profit or Loss and Other Comprehensive Income and the Consolidated Statement of Changes in Equity of Apple Bhd Group for the year ended 31 December 2019. (25 marks)