Question 8.3 and 8.6
Chapter 8 8.6 Colour Bhd was formed to acquire all the assets and liabilities of Blue Son Bho and ked Son and as at 31 December The following are the statements of financial position of Blue Son Bhd and Red Sign and as at 31 December Blue RM Red RM Goodwill 32,000 600,000 Non-current assets 150,000 400,000 Current assets 782,000 80,000 480,000 632,000 Ordinary shares 100,000 420,000 100,000 preference shares 30,000 Retained eamings 762,000 10,000 20,000 430,000 Liabilities 782,000 50,000 480,000 600,000 400,000 Number of ordinary shares Additional information: a. The registered capital of Colour Bhd consists of preference shares and ordinary shares. b. The fair values of the assets are as follows: Blue Red RM RM 650,000 420,000 Non-current assets Current assets 120,000 60,000 C. The consideration paid by Colour Bhd to Blue and Red is as follows: Blue Red RM RM To the preference shareholders Preference shares 110,000 To the ordinary shareholders Ordinary shares (valued at RM1 each) 660,000 450,000 All of the abovementioned shares were fully paid up. Required: i. Determine what a holder of 100 preference shares and a holder of 500 ordinary shares of Blue would receive on liquidation. i. Prepare the journal entries to close the books of Blue and open the books of Colour Bhd. ifi. Prepare the statement of financial position of Colour Bhd immediately after the amalgamation.Changes in Business Structure 295 X 8.3 Given below is the statement of financial position of Syarikat Raven. The owner, Mr Ravi, has converted the sole proprietorship into a limited liability company. Syarikat Raven Statement of Financial Position as at 31 December x4 Capital RM RM Current liabilities 500,000 Trade payables 22,000 522,000 Non-current assets Plant and machinery (cost) Accumulated depreciation 400,000 (36,000) 364,000 Furniture and fittings (cost) Accumulated depreciation 80,000 (38,000) 42,000 Current assets 406,000 Inventories Trade receivables 50,000 Bank 64,000 2,000 1 16,000 522,000 Gimmik Sdn Bhd was incorporated to purchase the business of Syarikat Raven on 31 December x4. The terms of the sale and purchase of Syankat Raven are as follows: . Gimmick Sdn Bhd is to take over all the assets (except cash at bank) and liabilities of Syarikat Raven for RM650,000. Syarikat Raven has a homegrown brand which is not recognised in its financial statements but will be recognised by Gimmick. The consideration transferred is 100,000 fully paid preference shares valued at RM100,000 and 500,000 fully paid ordinary shares of RM1. 10 per share in Gimmick Sdn Bhd. The fair values of the assets on 31 December x4 are: RM Plant and machinery 340,000 Furniture and fittings 40,000 Inventories 60,000 Trade receivables 60,000 Brand 100,000 The liquidation expenses of RM1,000 are to be paid by Syarikat Raven. Required: 1. Calculate the goodwill on business purchase. it. Close the books of Syarikat Raven (journal entries). uil. Prepare ledger entries to record the transactions in the books of Gimmick Sdn Bhd. iv. Prepare the initial statement of financial position of Gimmick Sdn Bhd
