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 Hello Bhd RM'000 Kitty Bhd RM1000 Non-current assets Property, plant and equipment Investment in Ping Pong Berhad 1,800 3,200 1,240 4,440 1,890 6,330 Current assets 1,800 1,040 2,840 Equity Share capital - RM1 ordinary shares Retained earnings 1,000 4,020 800 1,010 ...41- BAC305/03 Current liabilities 5,020 1,310 6,330 1,810 1,030 2,840 SUMMARISED INCOME STATEMENTS Profit before interest and tax Income tax expense Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year 780 (140) 640 510 1,150 520 (80) 440 96 536 MOVEMENT IN RETAINED RESERVES 474 Balance at 31 December 2019 Total comprehensive income for the year Balance at 31 December 2020 2,870 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; [10 marks) (b) Prepare the statement of comprehensive income for the Hello Group for the year ended 31 December 2020; and [15 marks] Ignore income taxes on the disposal No impairment losses have been necessary to date. 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 Hello Bhd RM'000 Kitty Bhd RM1000 Non-current assets Property, plant and equipment Investment in Ping Pong Berhad 1,800 3,200 1,240 4,440 1,890 6,330 Current assets 1,800 1,040 2,840 Equity Share capital - RM1 ordinary shares Retained earnings 1,000 4,020 800 1,010 ...41- BAC305/03 Current liabilities 5,020 1,310 6,330 1,810 1,030 2,840 SUMMARISED INCOME STATEMENTS Profit before interest and tax Income tax expense Profit for the year Other comprehensive income, net of tax Total comprehensive income for the year 780 (140) 640 510 1,150 520 (80) 440 96 536 MOVEMENT IN RETAINED RESERVES 474 Balance at 31 December 2019 Total comprehensive income for the year Balance at 31 December 2020 2,870 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; [10 marks) (b) Prepare the statement of comprehensive income for the Hello Group for the year ended 31 December 2020; and [15 marks] Ignore income taxes on the disposal No impairment losses have been necessary to date