Question 3 Hello Bhd bought 80% of the share capital of Kitty Bhd for RM1,240,000 on January 1, 2019. At that date Kitty Berhad's retained earnings stood at RM200.000 The statements of financial position at 31 December 2020, summarised income statements to that date and movement on retained earnings are given below: STATEMENTS OF FINANCIAL POSITION Non-current assets Property, plant and equipment Investment in Kitty Bhd Current assets Hello Bhd RM'000 Kitty Bhd RM'000 3,200 1,800 1,240 4,440 1,800 1,890 1,040 6,330 2.840 Equity Share capital - RM1 ordinary shares 1,000 800 Retained earnings 4,020 1,010 ...4/- | Current liabilities SUMMARISED INCOME STATEMENTS 5,020 1,810 1,310 1,030 6.330 2.840 Profit before interest and tax 780 520 Income tax expense (140' (80) Profit for the year 640 440 Other comprehensive income, net of tax 510 96 Total comprehensive income for the year 1.150 536 MOVEMENT IN RETAINED RESERVES Balance at 31 December 2019 Total comprehensive income for the year Balance at 31 December 2020 2,870 474 1,150 4.020 536 1.010 Hello Bhd sells one half of its holding in Kitty Bhd for RM700,000 on 30 June 2020. At that date, the fair value of the 40% holding in Kitty was slightly more at RM930,000 due to a share price rise. The remaining holding is to be dealt with as an associate. This does not represent a discontinued operation. No entries have been made in the accounts for the above transaction. Assume that profits accrue evenly throughout the year. It is the group's policy to value the non-controlling interest at its proportionate share of the fair value of the subsidiary's identifiable net assets. Required: (a) Prepare the consolidated statement of financial position for the Hello Group for the year ended 31 December 2020; (b) Prepare the statement of comprehensive income for the Hello Group for the year ended 31 December 2020; and Question 4 (a) (b) A Ringgit Malaysia-based company, Kipas Berhad, set up a foreign subsidiary on 30 June 2018. Kipas Berhad subscribed 24 000 for share capital when the exchange rate was 2 = RM1. The subsidiary, Fan Inc. borrowed 72 000 and bought a non-monetary asset for 96 000. Kipas Berhad prepared its financial statements on 31 December 2018 and by that time the exchange rate had moved to 3 = RM1. Required:- Prepare Fan Inc's statement of financial position at 31 December 2018 in both euros and Ringgit Malaysia (RM), and calculate the exchange gain or loss arising since 30 June 2018. [11 marks] Angin Berhad has a foreign subsidiary Wind Limited, acquired on 1 January 2019, which uses the Rupees(R) as its functional currency. Details of Wind Limited are given below: Net assets of Wind Limited at 1 Jan 2019 Net assets of Wind Limited at 1 Jan 2020 Net assets of Wind Limited at 31 Dec 2020 Rupees(R) 340,000 Rupees (R) 410,000 Rupees(R) 500,000 Wind Limited has paid no dividends since acquisition. It translates all income and expense items using the average rate for the period. Relevant exchange rates are: 1 January 2019 1 January 2020 31 December 2020 Average rate 1 Jan 2019 - 31 Dec 2020 Average rate 1 Jan 2020 - 31 Dec 2020 Required:- 2.1 Rupees(R): RM1 2.0 Rupees(R): RM1 1.8 Rupees(R): RM1 1.95 Rupees(R): RM1 1.9 Rupees(R): RM1 Calculate the exchange difference to be included in Angin Berhad's consolidated reserves for the year ended 31 December 2020. Show workings. [14 marks]