QUESTION 2

The following are the statement of comprehensive income of Peria Bhd and Sawi Sdn Bhd for year ended 30 September 2020:

	Peria (RM'000)	Sawi (RM'000)
Sales	8,990	2,860
(-) Cost of Sales	(4,032)	(974)
Gross Profit	4,958	1,886
(-) Operating Expenses	(1,987)	(932)
(+) Other Income	1,000	150
Profit before taxation	3,971	1,144
(-) Taxation	(998)	(250)
Profit after taxation	2,973	854
Revaluation of fixed assets	500	120
Comprehensive Income	3,473	974
Retained earnings as at 1 October 2019	2,955	999
Dividends declared in September 2020 - Ordinary shares - 5% preference shares	320 -	80 30

Additional Information:

1. Peria acquired 50% of the preference shares issued by Sawi on 1 October 2019 with cash consideration of RM300,000. Sawi has in issuance 600,000 units of preference shares with the value of RM600,000.

2. On 1 April 2020, Peria acquired 80% of the ordinary shares with consideration transferred of RM3million which has been fully recorded. Total issued ordinary shares is valued at RM10million. There are no other reserves in Sawi's books on acquisition date. 3. In post acquisition period, Sawi sold to Peria inventories at the invoice price of RM250,000 at cost plus 25%. Peria has sold 40% of these inventories to third parties. 4. On 1 July 2020, Peria gave a long term loan to Sawi with the amount of RM1million. This loan has an annual interest of 10%. Peria has recorded its interest income from the loan as part of other income. 5. On the date of acquisition, machinery belonging to Sawi was found to have fair value of RM30,000 less than the carrying value. Useful life of the machine is estimated at 60 months as at this date. 6. Peria provided consultancy services to Sawi. Peria billed Sawi RM50,000 and this amount was recorded as other income. Sawi has included the amount as part of its operating expenses.

7. Revaluation of fixed assets of Sawi is in respect to land revaluation in the post-acquisition period. 8. Full goodwill was calculated at RM60,000. For year ended 30 September 2020, the goodwill was impaired by RM10,000.

Required: a) Prepare the Consolidated Statement of Comprehensive Income for the group for year ended 30 September 2020. b) Prepare an extract of the Consolidate Statement of Changes in Equity for the group for year ended 30 September. Note: Show all relevant workings.