QUESTION 2 (20 MARKS) The statements of profit or loss of Sun Bhd, Aire Bhd, Sky Bhd and Sunny for the year ended 31 December 2019 are as follows: ACCT3132/Sept/Oct2020 Page 3 of 5 Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019 Sun Bhd RM 000 18.000 (8.100) 9,900 (6.520) 5,320 30 8,730 (200) 8.530 Aire Bhd RM'000 15,600 (5,120) 10,480 (1,010) Sunny Bhd RM 000 17.600 (4,510) 13,090 (1.030) Sky Bhd RM'000 1.208 (180) 1,028 (200) Revenue Cost of sales Gross profit Operating expenses Dividend income Gain on sale of plant Profit before tax Taxation Profit after tax 9.470 (90) 12,060 (88) 11.972 828 (20) 808 9,380 Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019 Sun Bhd RM'000 18,000 (8.100) 9,900 (6,520) 5.320 30 8,730 (200) 8.530 Aire Bhd RM000 15,600 (5.120) 10,480 (1,010) Sunny Bhd RM'000 17,600 (4,510) 13,090 (1,030) Sky Bhd RM'000 1,208 (180) 1.028 (200) Revenue Cost of sales Gross profit Operating expenses Dividend income Gain on sale of plant Profit before tax Taxation Profit after tax 9,470 (90) 9,380 12,060 (88) 11.972 828 (20) 808 2.200 Retained profit on 1 January 2019 Ordinary dividends paid 8,100 6,000 6.100 4,000 5,684 2,000 No of ordinary share capital 11,000 15,000 6.000 3,000 Additional information: 1. Sun Bhd acquired 70% of the issued ordinary shares of of Aire Bhd on 1 January 2016 with a reported retained profit of RM60 million. The fair value of the non-controlling interests in Aire Bhd on 1 January 2016 was RM3.5 million. The carrying value of all the assets of Aire Bhd reflected its fair value as at the acquisition date. Sun Bhd settle the acquisition with cash payment of RM70 million 2. On 1 January 2018. Aire Bhd paid RM8 million for the 90% of the interest acquired in Sunny Bhd. On the acquisition date the retained profit of Sunny Bhd was RM 2.3 million. The fair value of the non-controlling interests in Sunny Bhd on 1 January 2018 was RM2.5 million. Additional information: 1. Sun Bhd acquired 70% of the issued ordinary shares of of Aire Bhd on 1 January 2016 with a reported retained profit of RM60 million. The fair value of the non-controlling interests in Aire Bhd on 1 January 2016 was RM3.5 million. The carrying value of all the assets of Aire Bhd reflected its fair value as at the acquisition date. Sun Bhd settle the acquisition with cash payment of RM70 million 2. On 1 January 2018, Aire Bhd paid RM8 million for the 90% of the interest acquired in Sunny Bhd. On the acquisition date the retained profit of Sunny Bhd was RM 2.3 million. The fair value of the non-controlling interests in Sunny Bhd on 1 January 2018 was RM2.5 million. 3. Sun Bhd acquired 50% of the issued ordinary shares of Sky Bhd for a cash consideration of RM30 million on 1 July 2018. Sky Bhd is a joint venture company. 4. An equipment with carrying value of RM60 million for RM30 million was sold by Sun Bhd to Sunny Bhd. The remaining useful life of the equipment on that date was five years. 5. Aire Bhd sold goods to Sun Bhd with the selling price of RM10 million on June 2019. The profit margin was at 20% and as at 31 December 2019, Sun Bhd has sold all of these goods to third parties. 6. During the year, Sun Bhd also sold an inventory costing RM5 million for RM6 million to Sunny Bhd. Sunny Bhd yet sold any of it as at the year ends. 7. All entities have declared and paid their dividends in December 2019. All profits and losses are deemed to accrue evenly throughout the year. 8. Group policy is to provide depreciation expense in full in the year of purchase and none in the year of disposal using straight-line method. The non-controlling interests are measured at its fair value at the acquisition date. Required: Construct the Consolidated Statement of Profit or Loss and Other Comprehensive for the year ended 31 December 2019. Show all relevant workings. (20 marks) (CLO2:PLO6:05) QUESTION 2 (20 MARKS) The statements of profit or loss of Sun Bhd, Aire Bhd, Sky Bhd and Sunny for the year ended 31 December 2019 are as follows: ACCT3132/Sept/Oct2020 Page 3 of 5 Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019 Sun Bhd RM 000 18.000 (8.100) 9,900 (6.520) 5,320 30 8,730 (200) 8.530 Aire Bhd RM'000 15,600 (5,120) 10,480 (1,010) Sunny Bhd RM 000 17.600 (4,510) 13,090 (1.030) Sky Bhd RM'000 1.208 (180) 1,028 (200) Revenue Cost of sales Gross profit Operating expenses Dividend income Gain on sale of plant Profit before tax Taxation Profit after tax 9.470 (90) 12,060 (88) 11.972 828 (20) 808 9,380 Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019 Sun Bhd RM'000 18,000 (8.100) 9,900 (6,520) 5.320 30 8,730 (200) 8.530 Aire Bhd RM000 15,600 (5.120) 10,480 (1,010) Sunny Bhd RM'000 17,600 (4,510) 13,090 (1,030) Sky Bhd RM'000 1,208 (180) 1.028 (200) Revenue Cost of sales Gross profit Operating expenses Dividend income Gain on sale of plant Profit before tax Taxation Profit after tax 9,470 (90) 9,380 12,060 (88) 11.972 828 (20) 808 2.200 Retained profit on 1 January 2019 Ordinary dividends paid 8,100 6,000 6.100 4,000 5,684 2,000 No of ordinary share capital 11,000 15,000 6.000 3,000 Additional information: 1. Sun Bhd acquired 70% of the issued ordinary shares of of Aire Bhd on 1 January 2016 with a reported retained profit of RM60 million. The fair value of the non-controlling interests in Aire Bhd on 1 January 2016 was RM3.5 million. The carrying value of all the assets of Aire Bhd reflected its fair value as at the acquisition date. Sun Bhd settle the acquisition with cash payment of RM70 million 2. On 1 January 2018. Aire Bhd paid RM8 million for the 90% of the interest acquired in Sunny Bhd. On the acquisition date the retained profit of Sunny Bhd was RM 2.3 million. The fair value of the non-controlling interests in Sunny Bhd on 1 January 2018 was RM2.5 million. Additional information: 1. Sun Bhd acquired 70% of the issued ordinary shares of of Aire Bhd on 1 January 2016 with a reported retained profit of RM60 million. The fair value of the non-controlling interests in Aire Bhd on 1 January 2016 was RM3.5 million. The carrying value of all the assets of Aire Bhd reflected its fair value as at the acquisition date. Sun Bhd settle the acquisition with cash payment of RM70 million 2. On 1 January 2018, Aire Bhd paid RM8 million for the 90% of the interest acquired in Sunny Bhd. On the acquisition date the retained profit of Sunny Bhd was RM 2.3 million. The fair value of the non-controlling interests in Sunny Bhd on 1 January 2018 was RM2.5 million. 3. Sun Bhd acquired 50% of the issued ordinary shares of Sky Bhd for a cash consideration of RM30 million on 1 July 2018. Sky Bhd is a joint venture company. 4. An equipment with carrying value of RM60 million for RM30 million was sold by Sun Bhd to Sunny Bhd. The remaining useful life of the equipment on that date was five years. 5. Aire Bhd sold goods to Sun Bhd with the selling price of RM10 million on June 2019. The profit margin was at 20% and as at 31 December 2019, Sun Bhd has sold all of these goods to third parties. 6. During the year, Sun Bhd also sold an inventory costing RM5 million for RM6 million to Sunny Bhd. Sunny Bhd yet sold any of it as at the year ends. 7. All entities have declared and paid their dividends in December 2019. All profits and losses are deemed to accrue evenly throughout the year. 8. Group policy is to provide depreciation expense in full in the year of purchase and none in the year of disposal using straight-line method. The non-controlling interests are measured at its fair value at the acquisition date. Required: Construct the Consolidated Statement of Profit or Loss and Other Comprehensive for the year ended 31 December 2019. Show all relevant workings. (20 marks) (CLO2:PLO6:05)