Question
Question The draft statements of financial position of two companies as at 31 December 2020 were as follows: Yin Bhd Yang Bhd RM000 RM000 RM000
Question
The draft statements of financial position of two companies as at 31 December 2020 were as follows:
| Yin Bhd | Yang Bhd | ||
| RM000 | RM000 | RM000 | RM000 |
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 52,000 |
| 20,000 |
Investment in Yang Bhd, at cost |
| 26,000 |
| - |
|
| 78,000 |
| 20,000 |
Current Assets |
|
|
|
|
Inventory | 20,410 |
| 5,500 |
|
Trade receivables | 11,000 |
| 3,700 |
|
Interest receivable | 40 |
| - |
|
Bank and cash | 1,000 |
| - |
|
|
| 32,450 |
| 9,200 |
Total assets |
| 110,450 |
| 29,200 |
|
|
|
|
|
Equity |
|
|
|
|
Ordinary shares of 50 sen each |
| 35,000 |
| 5,000 |
Share premium |
| 11,000 |
| 4,500 |
Retained earnings |
| 15,650 |
| 12,000 |
|
| 61,650 |
| 21,500 |
Non-current liabilities |
|
|
|
|
4% Debentures 2030 |
| 30,000 |
| 4,000 |
|
|
|
|
|
Current Liabilities |
|
|
|
|
Trade and other payables | 18,300 |
| 3,540 |
|
Interest payable | - |
| 160 |
|
Dividend payable | 500 | 18,800 | - | 3,700 |
|
| 110,450 |
| 29,200 |
Their draft statements of comprehensive income for the year ended 31 December 2020 were:
| Yin Bhd | Yang Bhd |
| RM000 | RM000 |
Revenue | 122,500 | 27,200 |
Less: Cost of sales | 80,900 | 15,700 |
Gross profit | 41,600 | 11,500 |
Less: Administration and distribution costs | 24,500 | 6,500 |
| 17,100 | 5,000 |
Income from investments | 40 | - |
Interest expense | 1,200 | 160 |
Profit on ordinary activities before tax | 15,940 | 4,840 |
Less: Taxation | 5,000 | 1,500 |
Profit on ordinary activities | 10,940 | 3,340 |
Yin Bhd acquired its investment in Yang Bhd on 1 January 2020. The investment comprises:
8,000,000 ordinary shares for RM25 million
1,000,000 debentures for RM1 million
The balance on Yang Bhds retained earnings at the date of acquisition was RM9,450,000.
Yin Bhd sold goods to Yang Bhd for RM3,500,000 during the year ended 31 December 2020. All of these remained in inventory at the year end. Yin Bhd had sold these at its normal margin of 20%.
Yin Bhd is of the opinion that the goodwill is impaired and is now worth RM7 million.
Required:
Prepare the consolidated statement of financial position and statement of comprehensive income for Yin Group as at 31st December 2020.
(25 marks)
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