Statement of Financial Position As at 31 December 2019 Globe Bhd Setia Bhd RM'000 RM'000 NON-CURRENT ASSETS Property, plant and equipment 217,300 89,000 Investments in Setia Bhad 78,000 Investment in Tower Bhd 15,000 Total non-current assets 310,300 89,000 CURRENT ASSETS Inventories 35,250 14,081 Accounts receivable 5,625 15,919 Dividend receivable 5,370 Loan receivable from Setia Bhd 3,000 Cash and bank balances 16,500 12,122 Total current assets 65,745 42,122 TOTAL ASSETS 376,045 131,122 EQUITY Share capital 200,000 80,000 Retained earnings 87,033 22,192 Revaluation reserves 19,500 Total equity 306,533 102,192 NON-CURRENT LIABILITIES Loan 29,000 8, 105 3 BKAR3043 Financial Accounting & Reporting IV Deferred taxation 7,212 3,275 Total non-current liabilities 36,212 11,380 CURRENT LIABILITIES Accounts payable 19,000 7.390 Loan payable to Globe Bhd 3,000 Dividend payable 14,300 7,160 Total current liabilities 33,300 17,550 TOTAL LIABILITIES 69,512 28,930 TOTAL EQUITY AND LIABILITIES 376,045 131,122QUESTION 4 Globe Bhd had acquired 75% interest in the equity capital of Setia Bhd on 1 January 2017. On the acquisition date, the retained earnings of Setia Bhd were RM12,000,000. A freehold land and equipment of Setia Bhd recorded at cost of RM5,500,000 and 4,500,000 respectively. But the freehold land and the equipment was said to have a fair value of RM8,000,000 and 4,000,000 respectively. There are no adjustment had been made in the Setia Bhd's accounts to reflect the fair values. The share price of Setia Bhd was fair valued at RM1.60 per share. Setia Bhd's shares were issued at RM1.00 per share. The financial statements of both companies for the year ended 31 December 2019 are as follows: Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2019 Globe Bhd Setia Bhd RM'000 RM'000 Turnover 65,250 39,000 Cost of sales (23,400) (17,550) Gross profit 41,850 21,450 2 BKAR3043 Financial Accounting & Reporting IV Gain from disposal of land 1,120 Dividend income 7,882.5 Operating expenses (26, 782.5) (10,310) Profit before taxation 22,950 12,260 Tax expenses (5, 967) (2,408) Profit for the year 16,983 9,852 Other comprehensive income Gains on revaluation of property 2,000 Total comprehensive income 18,983 9,852 Statements of Changes in Equity (Partial) For the year ended 31 December 2019 Globe Bhd Setia Bhd RM'000 RM'000 Retained earnings brought forward 92,750 22,500 + Profit for the period 16,983 9.852 - Proposed dividend (14,300) (7,160) - Dividend (8,400) (3,000) Retained earnings carried forward 87,033 22,192
