QUESTION 4

The following are the extracts of statements of comprehensive income for year ended 30.6.2015:

	Pop (RM'000)	Song (RM'000)
Sales	33,300	8,890
Cost of Sales	(24,750)	(5,950)
Gross Profit	8,550	2,940
Administration expenses	(3,720)	(980)
Selling expenses	(1,020)	(135)
Miscellaneous expense	(110)	(32)
Gain from sale of asset to Song	150	-
Profit before tax	3,850	1,793
Taxation	(950)	(300)
Profit after tax	2,900	1,493
Retained earnings @ 1.7.2014	65,897	19,741
Dividends declared in June 2015: Ordinary shares Preference shares	800 Nil	300 Nil

Additional Information: 1. Pop acquired 80% of the issued ordinary shares belonging to Song on 1.7.2013. The total units of ordinary shares issued by Song was 5 million units with the par value of RM1. The market value of these ordinary shares on the date of acquisition was RM2.40. Non-controlling interest on this date was measured on fair value of shares held. Retained earnings of Song on that date was RM18,200,000. There are no other reserves on that date.

2. Pop acquired 40% of the preference shares belonging to Song. The total units of preference shares issued by Song was 1 million units at par value of RM1.

3. On the date of acquisition, machinery belonging to Song has a fair value of RM50,000 less than the carrying value. The useful life of the plant was estimated to be 5 years on this date. Song has not adjusted the fair value changes in its books. Pop sold equipment to Song for a profit of RM150,000. Useful life of the equipment is 5 years. Full depreciation is charged in the year of acquisition and none in the year of disposal. The group uses straight line depreciation method and depreciation is adjusted in administration expenses.

4. During the year, Song sold goods at the price of RM150,000 at cost plus 25% to Pop. Pop has sold 60% of these goods.

5. Full goodwill was impaired by RM5,000 in year ended 2014 and another RM48,000 in year ended 2015.

Required: (a) Prepare the consolidated statement of comprehensive income for year ended 30 June 2015. (b) Prepare the consolidated statement of changes in equity for year ended 30 June 2015. Note: Shoe all the relevant workings.