QUESTION 2 (25 MARKS)

Below are the statements of financial position of Brownies and Bun as at 31 December 2020.

Additional information:

1. Brownies acquired all the issued ordinary shares of Bun on 1 January 2017 when the retained profit of Bun was RM100,000.

2. Buns issued share capital has remained the same since year 2017.

3. In year 2019, Bun sold a piece of land costing RM300,000 for RM400,000 to Brownies. The land is still with Brownies. 4. In year 2020, Brownies sold to Bun a plant with a carrying amount of RM60,000 for RM80,000. The remaining economic life of the plant is five years.

5. Brownies had also sold trading inventories costing RM5,000 for RM7,000 to Bun in the year 2020 and all these inventories remained unsold.

6. Included in the trade receivables of Brownies is RM10,000 due from Bun. However, Bun sent RM3,000 on 31 December 2020, which Brownies received on 3 January 2021.

7. Goodwill has been impaired by 40 percent.

Required:

Prepare the consolidated statements of financial position for Brownies Group as at 31 December 2020.

Brownies RM'000 1,500 400 Ordinary share capital Retained profit Bun RM'000 800 250 Trade Payables 150 2,050 100 1,150 690 380 (60) Land Plant and machinery Accumulated depreciation Investment in Bun-800,000 shares Trade Receivables Inventories Bank 800 200 (50) 1,000 30 40 30 2,050 40 60 40 1,150