The following information is also available:

i) High Bhd acquired 80% of the ordinary shares in Middle Bhd on 1 January 2018 for $530,000 when the accumulated profits of Middle Bhd was $75,000. There have been no changes in Middle Bhd's ordinary shares since then.

ii) At the date of acquisition, Middle's office equipment had a fair value of $30,000 higher than their book value. This revaluation has not been reflected in the books of Middle. At the date of acquisition, office equipment had an estimated life of 10 years.

iii) High Bhd acquired 30% of the ordinary shares in Low Bhd on 1 January 2019 for $150,000 when the retained profits of Low Bhd was $90,000.

iv) During 2019, Middle Bhd sold inventories to High Bhd at invoice value of $100,000. The markup was 25% and 50% of these goods were still in the inventory of High Bhd at 31st December 2019.

v) On 1st December 2019, Low Bhd sold inventories to High Bhd at invoice value of $50,000. The margin was 10% and 100% of these goods were still in the inventory of High Bhd at 31st December 2019.

vi) On 28 December 2019 Middle Bhd sent a cheque for $40,000 to High Bhd. The cheque was recorded in the books of High Bhd on 2nd January 2020.

vii) The goodwill arising on consolidation on Middle Bhd had been impaired by $5,000 up to 31 December 2018, with a further impairment of $10,000 in the current year ended 31 December 2019.

viii) On 31 December 2019, the directors of High Bhd proposed a dividend of 20 cents per shares. Middle Bhd and Low Bhd had paid a dividend of 5 cents per share on 3 December 2019.

ix) It is group policy to value the non-controlling interest using the proportion of net assets method.

x) All revenues and expenses are expected to accrue evenly throughout the year.

Required:

a) Prepare consolidated statement of comprehensive income for High Bhd and its group of companies for the year to 31 December 2019. (40 marks)

b) Prepare consolidated statement of financial position for High Bhd and its group of companies as at 31 December 2019. (20 marks)

The statements of financial position and comprehensive income High Bhd, Middle Bhd & Statements of Financial Position at 31 December 2019 High Bhd Middle Bhd Low Bhd Assets RM RM RM Non-current assets Land & Buildings 800.000 400.000 300.000 Office Equipment 601,000 360.000 250,000 Investments 700.000 20.000 2,101,000 780,000 550.000 Current assets Inventories 500.000 119.250 70.000 Trade receivables 89.000 40.000 55,500 Inter-company current account 50.000 Cash at bank 70,000 58,200 30.000 Total assets 2.810,000 997.450 705,500 Equity & Liabilities Equity Ordinary shares 500.000 400.000 250.000 Retained earnings 804,000 216,400 140.150 1,304,000 616,400 390,150 Current liabilities Trade payables 1,006,000 170.000 90.000 Dividend Proposed 100.000 Inter-company current account 10.000 Other liabilities 400.000 211,050 215,350 Total Equity and Liabilities 2.810,000 997.450 705,500 Statements of Comprehensive Income for year to 31 December 2019 High Bhd Middle Bhd Low Bhd RM RM RM Revenue 900,000 300.000 200.000 Cost of sales (380,000) (182.000) (113,050) Gross profit 520.000 118.000 86,950 Operating expenses (90,000) (13,200) 9,000) Profit before tax 430,000 104,800 77.950 Dividend Income 21,750 2.000 Tax expense (52.750) (30.400) (15,300) Profit for the year 399.000 76,400 62,650 Statements of Changes in Retained Earnings for the year ended 31 December 2019 High Bhd Middle Bhd Low Bhd RM RM RM Balance at 1 January 2019 505,000 160.000 90.000 Profit for the year 399,000 76.400 62.650 Less: Dividends (100.000) (20.000) (12,500) Balance at 31 December 2019 804.000 216,400 140.150 The statements of financial position and comprehensive income High Bhd, Middle Bhd & Statements of Financial Position at 31 December 2019 High Bhd Middle Bhd Low Bhd Assets RM RM RM Non-current assets Land & Buildings 800.000 400.000 300.000 Office Equipment 601,000 360.000 250,000 Investments 700.000 20.000 2,101,000 780,000 550.000 Current assets Inventories 500.000 119.250 70.000 Trade receivables 89.000 40.000 55,500 Inter-company current account 50.000 Cash at bank 70,000 58,200 30.000 Total assets 2.810,000 997.450 705,500 Equity & Liabilities Equity Ordinary shares 500.000 400.000 250.000 Retained earnings 804,000 216,400 140.150 1,304,000 616,400 390,150 Current liabilities Trade payables 1,006,000 170.000 90.000 Dividend Proposed 100.000 Inter-company current account 10.000 Other liabilities 400.000 211,050 215,350 Total Equity and Liabilities 2.810,000 997.450 705,500 Statements of Comprehensive Income for year to 31 December 2019 High Bhd Middle Bhd Low Bhd RM RM RM Revenue 900,000 300.000 200.000 Cost of sales (380,000) (182.000) (113,050) Gross profit 520.000 118.000 86,950 Operating expenses (90,000) (13,200) 9,000) Profit before tax 430,000 104,800 77.950 Dividend Income 21,750 2.000 Tax expense (52.750) (30.400) (15,300) Profit for the year 399.000 76,400 62,650 Statements of Changes in Retained Earnings for the year ended 31 December 2019 High Bhd Middle Bhd Low Bhd RM RM RM Balance at 1 January 2019 505,000 160.000 90.000 Profit for the year 399,000 76.400 62.650 Less: Dividends (100.000) (20.000) (12,500) Balance at 31 December 2019 804.000 216,400 140.150