QUESTION 3- STION 8 AA Bhd acquired 80% interest in the equity capital of BB Bhd on 1 January 2023. The purchased consideration was satisfied as follows: An immediate cheque payment of RM5,000,000 An amount of RM4,000,000 to be paid on 1 January 2026, with incremental borrowing cost was 3% per annum. An issue of 1,000,000 AA's shares issued at its fair value of RM4.50 each. AA Bhd also acquired 35% of CC Bhd at purchase consideration or RM2,800,000 by cheque and used equity method to record the investment. The fair value of identifiable net assets of BB Bhd was RM20 million. The details of assets, liabilities and equities of AA Bhd and BB Bhd on 1 January 2023 as below: 1 BKAR3043 Financial Accounting & Reporting IV Details Non-current assets AA Bhd RM'million BB Bhd RM'million 30* 15 Current assets 12 9 Current liabilities 14 10 Share Capital (RM 1 per unit) 16 11 Retained earnings 10 2 Revaluation surplus 2 1 *assuming the journal entry for Question 3 have been taken in account except for the investment in associate. The investment in subsidiary was included in the non-current asset account. At the acquisition date, BB Bhd has disclosed in its notes to financial statement a contingent liability of RM300,000 involving a pending lawsuit in which the lawyer advised that there was a high probability that a company would lose the case. BB Bhd failed to include machinery fair value differences greater than book value amounting to RM500,000 in the non-current asset account at the time of acquisition. BB Bhd share price at the time of acquisition was RM1.80. BB Bhd has 11 million units of outstanding shares. AA Bhd uses proportionate share of net assets method to measure the non-controlling interest. REQUIRED: (a) Calculate the cost of investment and prepare journal entry to record the acquisition for AA Bhd. (b) Compute goodwill on consolidation. (c) Prepare consolidation journal entries at 1 January 2023. (d) Prepare the Consolidated Statement of Financial Position as at 1 January 2023. (e) (f) If NCI is measured at fair value, determine goodwill on consolidation. Prepare consolidation journal entries. Prepare the Consolidated Statement of Financial Position as at 1 January 2023 based on Question (e).