Tag acquired 240 million ordinary shares of Kiki on 1 January x9 on the following terms: immediate cash payment of RM] 00 million, Share exchange of one share in Tag for every one share in Kiki, RM55 million zero interest loan stock payable on 1 January x10, and RM33 million cash if the prots of Kd increase by 20% over the next year. To date only the cash payment ofRM100 million has been recorded. Tag's cost ofcapital is 10%. The fair value of Tag's and Kiki's shares on 1 January x9 were RM2.50 and RM3.50 each, respectively. Management of both the companies believe prots can increase by 20% next year. On the acquisition date, the retained prot of Kiki was RM20 million. Shortly after the acquisition date, Kiki declared and paid ordinary dividends of RM20 million. Tag received its share of the dividends on 10 January x9 and recognized it in its statement of prot or loss. Given below are the statements of nancial position ofTag and Kiki as at 31 December X9: Tag Kiki RM'000 RM'000 250,000,000 ordinary shares 660,000 300,000,000 ordinary shares 400,000 Retained prot 136,000 60,000 10% debentures 200,000 50,000 Trade pables 44,000 30,000 1,040,000 540,000 Land and buildings 450,000 250,000 Plant and equipment 180,000 160,000 Research & development 160,000 Nil Investment in Kiki 100,000 - Land and buildings 450,000 250,000 Plant and equipment 180,000 160,000 Research & development 160,000 Nil Investment in Kiki 100,000 Trade receivable 45,000 25,000 Inventories 50,000 40,000 Bank 55,000 65,000 1,040,000 540,000Additional information: a. no f. g. h. On 1 January x9, the fair value of Kiki's plant and equipment was RM250 million. Kiki did not adjust the financial statements to reect the new value. Both the companies depreciate plant and equipment at 20% using the reducing balance method. The carrying amount of the plant and equipment of RM 160 million as shown in the financial position of Kiki is after providing for year x9 depreciate charge. Kiki did not purchase nor dispose of any plant and equipment during year x9. Kiki has an organically grown house brand that is identiable and separable from its other assets. The fair value of the brand is RM30 million, with indefinite useful life. Provision is made for the second half- year's debenture interest for both the companies. Half of the inventories of Kiki were purchased from Tag. Tag made a profit of 25% on the invoice price on the inventories sold to Kiki, out of which 10% was to cover transport costs. Unrealized profit in the opening inventories of Kiki was RM] million. During the year, Kiki sold to Tag a completed research and development project which was capitalized at RM150 million for RM200 million. The economic life of this research and development is 5 years. The amount shown in the financial position of Tag is net of am0rtization. Trade receivables of Tag include RM25 million due from Kiki. However Kiki remitted RMS million on 31 December x9, which was received by Tag on 3 January x10. Twenty percent of the full goodwill was impaired by 31 December x9. Fair value ofNCI as at 1 January x9 was determined to be RM 105,000. Required: From the infonnation given, prepare the consolidated statement of financial position for the group as at 3 11'1fo9. (Note: Detailed working must be shown)
