Question 3 Prepare the consolidated statement of financial position of Panda group as at 31 December 2019 and advise the company in relates to the acquisition of Stone in group reporting. Kindly refer to appendix one (1) for the information required. (200 words) Ouest - + Fit to page Page view A Re Appendi Panda Bhd is a company that listed on Bursa Malaysia. It has finally succeeded in acquiring a controlling interest in its principle supplier, Stone Bhd. On 1 April 2019, Panda acquired 85% of the equity share capital of Stone Bhd. The consideration consisted of two elements: a share exchange of three shares in Panda for every five acquired shares in Stone and the issue of a RM100 6% loan note for every 500 shares acquired in Stone. None of the purchase consideration, both share issue and issue of the loan notes has yet been recorded by Panda At the date of acquisition, shares in Panda had a market value of RM5 each and the shares of Stone had a stock market price of RM3.50 each. The retained earnings of Stone on the date of acquisition was RM18,000. Panda group uses the fair value method to value the non-controlling interest. At the date of acquisition, the share price of Stone can be deemed to be representative of the fair value of the shares held by the non controlling interest. On 1 April 2019, the fair value of an item of plant in Stone was RM2,000 more than carrying amount and no changes have been made in the financial statements of Stone regarding to the fair value adjustment. The plant had a remaining useful life of 25 months at 1 April 2019. All profits and losses accrued evenly throughout the year Panda had traded with Stone for may years before the acquisition Sales from Stone to Panda throughout the year ended 31 December 2019 were consistently RM12,000 per month. Stone sells trading inventories to Panda at cost plus 40% and Panda had RM3,500 of these goods in inventory as at 31 December 2019. Trade receivables of Panda include RM1,500 due from Stone. Panda has factored RM1,000 of these receivables to a third party It 15 approaching the year end, the CFO wants to understand how the above acquisition and transactions will be reported, both in the financial statements and elsewhere. She is Dersonalidade 97470/Desktop/NFRA1/Coursework20FIN4033%20-%20Degree(Alternative20assessment.pdf - + fit to page Pageview | A Read aloud party It is approaching the year end, the CFO wants to understand how the above acquisition and transactions will be reported, both in the financial statements and elsewhere. She is concerning the issues regarding the acquisition and the conceptual reasons underlying the financial reporting. Given below are the statement of financial position of Panda Bhd and Stone Bhd as at 31 December 2019. Statements of financial position as at 31 December 2019 Panda (RM 000) Stone (RM 000) Non current assets Property, plant and equipment 215.000 108,000 Page 6 of 8 SEGI PROGRAMMERAC - + Fit to page D Page view | A Current assets Inventory Trade receivables Bank 19,600 13,800 11,500 44,900 259,900 12,800 9,000 3,500 25,300 133,300 Total assets Equity Ordinary shares of RM1 each Retained earnings 103,900 78,000 181,900 55,850 46,800 102,650 Non current liabilities 6% loan notes 22,000 Current liabilities Trade payables Other current liabilities 33.000 23,000 78,000 259,900 25,450 5,200 30,650 133,300 Total equity and liabilities hop Question 3 Prepare the consolidated statement of financial position of Panda group as at 31 December 2019 and advise the company in relates to the acquisition of Stone in group reporting. Kindly refer to appendix one (1) for the information required. (200 words) Ouest - + Fit to page Page view A Re Appendi Panda Bhd is a company that listed on Bursa Malaysia. It has finally succeeded in acquiring a controlling interest in its principle supplier, Stone Bhd. On 1 April 2019, Panda acquired 85% of the equity share capital of Stone Bhd. The consideration consisted of two elements: a share exchange of three shares in Panda for every five acquired shares in Stone and the issue of a RM100 6% loan note for every 500 shares acquired in Stone. None of the purchase consideration, both share issue and issue of the loan notes has yet been recorded by Panda At the date of acquisition, shares in Panda had a market value of RM5 each and the shares of Stone had a stock market price of RM3.50 each. The retained earnings of Stone on the date of acquisition was RM18,000. Panda group uses the fair value method to value the non-controlling interest. At the date of acquisition, the share price of Stone can be deemed to be representative of the fair value of the shares held by the non controlling interest. On 1 April 2019, the fair value of an item of plant in Stone was RM2,000 more than carrying amount and no changes have been made in the financial statements of Stone regarding to the fair value adjustment. The plant had a remaining useful life of 25 months at 1 April 2019. All profits and losses accrued evenly throughout the year Panda had traded with Stone for may years before the acquisition Sales from Stone to Panda throughout the year ended 31 December 2019 were consistently RM12,000 per month. Stone sells trading inventories to Panda at cost plus 40% and Panda had RM3,500 of these goods in inventory as at 31 December 2019. Trade receivables of Panda include RM1,500 due from Stone. Panda has factored RM1,000 of these receivables to a third party It 15 approaching the year end, the CFO wants to understand how the above acquisition and transactions will be reported, both in the financial statements and elsewhere. She is Dersonalidade 97470/Desktop/NFRA1/Coursework20FIN4033%20-%20Degree(Alternative20assessment.pdf - + fit to page Pageview | A Read aloud party It is approaching the year end, the CFO wants to understand how the above acquisition and transactions will be reported, both in the financial statements and elsewhere. She is concerning the issues regarding the acquisition and the conceptual reasons underlying the financial reporting. Given below are the statement of financial position of Panda Bhd and Stone Bhd as at 31 December 2019. Statements of financial position as at 31 December 2019 Panda (RM 000) Stone (RM 000) Non current assets Property, plant and equipment 215.000 108,000 Page 6 of 8 SEGI PROGRAMMERAC - + Fit to page D Page view | A Current assets Inventory Trade receivables Bank 19,600 13,800 11,500 44,900 259,900 12,800 9,000 3,500 25,300 133,300 Total assets Equity Ordinary shares of RM1 each Retained earnings 103,900 78,000 181,900 55,850 46,800 102,650 Non current liabilities 6% loan notes 22,000 Current liabilities Trade payables Other current liabilities 33.000 23,000 78,000 259,900 25,450 5,200 30,650 133,300 Total equity and liabilities hop