Question 3 The following are the statements of financial position for Painting Berhad and Lukis Sdn Bhd for the year as at 31 December 2021: Investment in Lukis: Ordinary shares 5% Preference shares Intangible asset-brand Non-current assets: Land & building Machinery Equipment Current assets: Inventory Trade receivables 6% Loan to Lukis Bank Painting (RM'000) Lukis (RM'000) 3,900 300 80 8,700 3,400 2,500 1,010 900 650 3,010 760 3,220 680 70 2,730 1,920 Total 25,330 8,500 Ordinary shares 15,000 4,500 5% Preference shares 3,000 600 6% Redeemable preference shares 200 Retained earnings 4,340 2,490 Trade payables 2,990 660 6% Loan from Painting 50 Total 25,330 8,500 Additional information: 1. Painting Bhd acquired 75% (3 million units) of the ordinary shares issued by Lukis Sdn Bhd on 1 January 2021 with cash payment of RM3.9 million. Retained earnings on this date was recorded as RM1.85 million. 2. On the acquisition date, equipment belonging to Lukis was estimated to have a lower fair value of RM20,000 with a useful life of 5 years. Fair value of land belonging to Painting and Lukis were estimated to increase by RM500,000 and RM200,000 respectively on 31 December 2021. Painting did not recognize the intangible asset (brand). Brand has yet to be impaired. None of these fair value changes have been recorded.