Question
QUESTION 2 (30 MARKS) Given below are the Statements of Financial Position of the parent company. Parent RM000 Subsidiary RM000 Ordinary shares at RM1 each
QUESTION 2 (30 MARKS)
Given below are the Statements of Financial Position of the parent company.
|
| Parent RM000 |
| Subsidiary RM000 |
| Ordinary shares at RM1 each | 715,000 |
| 506,000 |
| Revaluation reserves | 165,000 |
| 44,000 |
| Retained profit | 275,000 |
| 110,000 |
| Liabilities | 44,000 |
| 64,000 |
|
Building | 1,199,000 365,000 |
| 724,000 364,000 |
| Machinery | 350,000 |
| 250,000 |
| Inventory | 88,000 |
| 44,000 |
| Trade receivables | 77,000 |
| 44,000 |
| Cash at bank | 319,000 |
| 22,000 |
|
| 1,199,000 |
| 724,000 |
Parent company purchased all the ordinary shares of subsidiary company on 1 January 2020 for RM200,000 which was discharged by payment of cash and so offered ordinary shares of subsidiary company one ordinary share in subsidiary company valued RM1.50 per shares.
Required:
- Prepare journal entries in the books of a parent company to record the acquisition of shares in the subsidiary company.
(4 marks)
- Prepare the Statement of Financial Position of parent company immediately after the takeover.
(10 marks)
- Prepare the Consolidated of Financial Statement as at 31 December 2020.
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Accounting Information System
Authors: James A. Hall
7th Edition
978-1439078570, 1439078572
