QUESTION 1 - Jan 2020

The following are the statement of comprehensive income for Mocha Berhad, Arabica Sdn Bhd, and Latte Sdn Bhd for year ending 31.12.2019:

Draft Statement of Comprehensive Income for period ending 31.12.2019

	Mocha (RM'000)	Arabica (RM'000)	Latte (RM'000)
Turnover	130,000	24,600	16,400
Cost of Sales	(72,200)	(14,200)	(9,400)
Gross Margin	57,800	10,400	7,000
Expenses	(38,400)	(7,500)	(4,020)
Operating Profit	19,400	2,900	2,980
Gain on sale of plant	1,200	Nil	Nil
Dividends from subsidiary	1,000	400	Nil
Profit before tax	21,600	3,300	2,980
Taxation	(5,400)	(800)	(700)
Profit after taxation	16,200	2,500	2,280
Retained Earnings @ 1.1.2019	46,200	17,600	10.900
Other information: Ordinary dividends paid in 2019 Preference dividends paid in 2019 Ordinary share capital	4,000 Nil 130,000	2,000 Nil 19,000	800 100 11,600

Additional Information:

1. Mocha acquired 80% of the ordinary shares of Arabica on 1.1.2019. Goodwill on consolidation was RM4.4million. Goodwill was impaired by 20% as at 31.12.2019. Non-controlling interest is measured in proportion to the fair value of the net assets of the subsidiary on the acquisition date.

2. On 1st July 2019, Arabica acquired 75% of issued ordinary shares and 20% of preference shares belonging to Latte for RM4.6million. Goodwill on consolidation was RM500,000, RM100,000 of the goodwill was impaired as at 31.12.2019.

3. During the year, Arabica sold inventory at invoice value of RM400,000 to Mocha and sot plus 25%. Mocha has not sold any of these inventories yet.

4. In year 2019, Mocha sold a plant of carrying amount of RM700,000 for RM900,000. The remaining useful life is 5 years. Full year's depreciation is given in the year of acquisition and non in the year of disposal. Depreciation policy is on a straight line basis.

Required:

(a) Prepare the consolidated statement of comprehensive income for the period ending 31.12.2019.

(b) Determine the group's retained earnings as at 31.12.2019.