QUESTIUNT 40 MANN Retained profits carried forward 18,470 9,820 Statement of Financial Position at 31 December 2015 Face Bhd Book Bhd RM1000 RM000 RM000 RM1000 :. Face Bhd acquired 70of the issued share capital of Book Bhd for RM 14,000,000 on 1 January 2016. The purchase consideration was RM 10,000,000 in cash and the bence by an issue of 2,000,000 ordinary share valued at RM2.00 ach. On this date, the retained profits of Book Bhd were RM 4500,000. The draft statements of the two companies for the current varended 31 December 2018 are as follows: Statement of Income and Other Comprehensive Income forthe year ended 2018 Fare Bhd BookBhd RM000 RM000 RM1000 RM000 Share capital of RM1 ach Retained profits 18,000 18,470 5.000 9,820 143 20 36,470 24,000 11,000 Sales Opening inventories Purchase Long term loans Provisions forcbimo Deferred taxation 1.500 2500 1,450 5.4501 1,200 800 1,000 3,000 4,500 10,000 14500 3,500 4,000 7.500 was recorded at cost RM1,300,000. No adjustment has been made in the accounts to reflect the fair value. b) During the year 2018, Book Bhd transferred inventories to Face Bhd for RM2,700,000 and RM700,000 of these inventories remained unsold by year-end. The corresponding intragoup sales and closing inventories for the 2017 financial year were RM4,000,000 and RM600,000 respectively. The profit marginto Book Bhd was20% on selling price. (c) Face Bhd manufactures boat engines for coast industry. During the year 2017, Face Bhd sold 30 boat engines to Book Bhd for the latter's use as property, plant and equipment. The transfer price is RM2,300,000 of which Face Bhd recorded a RM1,000,000 profit for the transfer. The group depreciates such assets at 10% rate per annum on cost, charging full year's depreciation in the year of purchase and nonein theyear of disposal. (d) Trade receivables of Face Bhd include RM400,000 due from Book Bhd. Closing inventoria Gross profit (5,000) 14,000 19.500) 14,500 3.509 7500 Trade Pyables Other payable Taxation Bill payable 2300 610 1,000 690 1,500 30 43 510 4,560 46,480 2685 20505 Operating expenses Operating profit (950) 13,550 500 7.000 11,000 Property, pont & equipment Invatments in Book Bhd 13,000 14,000 (139 Finance costs Dividend income (net) Profit before taxation (240) 560 13,870 Z7.000 11,000 6,870 8,000 Taxation Profit for the year 1950 12920 (550 6,320 Inventoris Ta de receivable Other receivables Bank 6.500 2,20 2730119,480 46.480 4.400 2.700 1.206 1,200 9505 20,303 Movements in retained profits: (e)It is the group's policy to meaure non-controlling interest at acquisition-date fair value. Ignore tax effets of unrealised profits arising from intrroup transactions and on fair value adjustment Retained profits brought forward Profit for the year Available for appropriation 6,750 12920 19,670 4,300 6,320 10,6 D Additional information: la) At acquisition date, the freehold land of Book Bhd has a fair value of RM3,500,000. The land which is included in property, plant and equipment of Book Bhd Required: 18 (i)Determine the amount of goodwillon acquisition. marks) Dividends pd (1.200 (809 (ii) Determine the share of non-controlling interest in the realized profit for the finandalyear end 2018. (7 marks) (iii) Prepare the consolidated financial statements of Face Bhd for the year ended 31 December 2018. (20 marks) QUESTIUNT 40 MANN Retained profits carried forward 18,470 9,820 Statement of Financial Position at 31 December 2015 Face Bhd Book Bhd RM1000 RM000 RM000 RM1000 :. Face Bhd acquired 70of the issued share capital of Book Bhd for RM 14,000,000 on 1 January 2016. The purchase consideration was RM 10,000,000 in cash and the bence by an issue of 2,000,000 ordinary share valued at RM2.00 ach. On this date, the retained profits of Book Bhd were RM 4500,000. The draft statements of the two companies for the current varended 31 December 2018 are as follows: Statement of Income and Other Comprehensive Income forthe year ended 2018 Fare Bhd BookBhd RM000 RM000 RM1000 RM000 Share capital of RM1 ach Retained profits 18,000 18,470 5.000 9,820 143 20 36,470 24,000 11,000 Sales Opening inventories Purchase Long term loans Provisions forcbimo Deferred taxation 1.500 2500 1,450 5.4501 1,200 800 1,000 3,000 4,500 10,000 14500 3,500 4,000 7.500 was recorded at cost RM1,300,000. No adjustment has been made in the accounts to reflect the fair value. b) During the year 2018, Book Bhd transferred inventories to Face Bhd for RM2,700,000 and RM700,000 of these inventories remained unsold by year-end. The corresponding intragoup sales and closing inventories for the 2017 financial year were RM4,000,000 and RM600,000 respectively. The profit marginto Book Bhd was20% on selling price. (c) Face Bhd manufactures boat engines for coast industry. During the year 2017, Face Bhd sold 30 boat engines to Book Bhd for the latter's use as property, plant and equipment. The transfer price is RM2,300,000 of which Face Bhd recorded a RM1,000,000 profit for the transfer. The group depreciates such assets at 10% rate per annum on cost, charging full year's depreciation in the year of purchase and nonein theyear of disposal. (d) Trade receivables of Face Bhd include RM400,000 due from Book Bhd. Closing inventoria Gross profit (5,000) 14,000 19.500) 14,500 3.509 7500 Trade Pyables Other payable Taxation Bill payable 2300 610 1,000 690 1,500 30 43 510 4,560 46,480 2685 20505 Operating expenses Operating profit (950) 13,550 500 7.000 11,000 Property, pont & equipment Invatments in Book Bhd 13,000 14,000 (139 Finance costs Dividend income (net) Profit before taxation (240) 560 13,870 Z7.000 11,000 6,870 8,000 Taxation Profit for the year 1950 12920 (550 6,320 Inventoris Ta de receivable Other receivables Bank 6.500 2,20 2730119,480 46.480 4.400 2.700 1.206 1,200 9505 20,303 Movements in retained profits: (e)It is the group's policy to meaure non-controlling interest at acquisition-date fair value. Ignore tax effets of unrealised profits arising from intrroup transactions and on fair value adjustment Retained profits brought forward Profit for the year Available for appropriation 6,750 12920 19,670 4,300 6,320 10,6 D Additional information: la) At acquisition date, the freehold land of Book Bhd has a fair value of RM3,500,000. The land which is included in property, plant and equipment of Book Bhd Required: 18 (i)Determine the amount of goodwillon acquisition. marks) Dividends pd (1.200 (809 (ii) Determine the share of non-controlling interest in the realized profit for the finandalyear end 2018. (7 marks) (iii) Prepare the consolidated financial statements of Face Bhd for the year ended 31 December 2018. (20 marks)