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ADVANCED ACCOUNTING II DAC3043
LECTURER :…………………………………………………………………………… MATRIC NO : …………………………………………. ..…………………………………… VENUE MARCH 2011 HOURS : …………………………………………. DURATION : 3 PROGRAMME :
INSTRUCTIONS: 1. Candidates must read all questions carefully.
2. The examination script consists of FIVE (5) questions. 3. Answer ALL questions in the answer booklet provided.
DO NOT OPEN THE EXAMINATION SCRIPT UNTIL FURTHER INSTRUCTION
THIS EXAMINATION SCRIPT CONTAINS 10 PAGES INCLUDING THE FRONT COVER
DAC3043 1.850 Ordinary shares of RM1 each Share premium Retained profits Non controlling interest 8% debenture Trade payable Goodwill on consolidation Non current assets Investment in associated companies Short term investments (more than 6 months) Inventory Trade receivables Bank Consolidated Statement of Comprehensive Income for the year ended 31 December 2010 RM’000 9.850 (5.000) 4.250 850 9.300 2010 RM’000 5.800 14.200 11.850 500 5.000 7.300 12. Use the answer booklet provided.100 1.500 1. Given below are the consolidated statement of financial position and the consolidated statement of comprehensive income for Veritas Group.250 6.200 600 14.500 1.450 (1.CONFIDENTIAL (100 marks) Time: 3 hours INSTRUCTION Answer ALL questions.750 1.850 (1.720 2.300 1.530 1.950 500 2.200 1.500 3.450 2/10 DAC3043 ADVANCED ACCOUNTING II .000 500 1.450 Turnover Cost of sales Gross profit Operating expenses Operating profit Share of profits of associates Interest expense Profit before tax Taxation – Group Profit after tax Profit after tax attributable to: Group Minority interest 1.550 1.750 1.000) 2. Consolidated Balance Sheets as at 31 December 2009 RM’000 6.350 250 (150) 3.300 300 5.200 500 650 900 600 9.500) 3.500 1.
000 were sold for cash of RM900. (7 marks) (b) DAC3043 ADVANCED ACCOUNTING II 3/10 . Non-current assets of book value of RM750. you are required to: (a) Show the ledger entries for the relevant items in the Consolidated Statement of Financial Position of Veritas Group.000 RM? (ii) Share of profits of associates of RM250.000 during the year.CONFIDENTIAL Additional information: (i) Included in the expenses are: Impairment of goodwill on consolidation of subsidiaries Depreciation of non-current assets Gain on disposal of non-current assets DAC3043 RM200.000 RM600. (13 marks) Prepare the Consolidated Statement of Cash Flow for Veritas Group for the year ended 31 December 2010. (iii) Using indirect method.000 is net of impairment of goodwill of RM50.000.
5 marks) ii. (a) Describe the following types of joint ventures as provided by FRS 131 Interests in Joint Ventures: i.600) 900 80 (120) (150) 710 44.5 (250) 504.500 (1. Jointly Controlled Operations (1.5 100 Diamond RM’000 1.500 (1.5 marks) iii.000) 500 50 (30) (80) 440 (40) 400 (100) 300 40 Star RM’000 800 (500) 300 (20) (50) 230 230 230 50 Revenue Cost of sales Gross profit Other operating income Distribution costs Administration expenses Profit from operations Dividends received from Diamond and Star Finance cost Profit before tax Income tax expense Profit after tax Interim dividends (net) paid DAC3043 ADVANCED ACCOUNTING II 4/10 .5 (130) 374. Jointly Controlled Entity (2 marks) (b) Shown below are the statement of comprehensive income and statement of financial position for Ace. Statement of Comprehensive Income For The Year Ended 31 December 2010 Ace RM’000 2. Jointly Controlled Assets (1.CONFIDENTIAL DAC3043 2. Diamond and Star.
As at 31 December 2010.150 Ordinary shares of RM1.200 200 1. On the same date.5 274.600 4.400 500 300 230 1. During 2010.000 to Diamond.500 Diamond RM’000 800 640 260 1.320 Non Current Assets Property.700 Star RM’000 600 370 180 1.800 3.030 2.000 400 200 1. plant and equipment Investments Current Assets Inventories Accounts receivable Cash in hand and at bank 1.00 each Retained earnings brought forward Current year retained earnings Non-current liabilities Loans 10% debenture Current liabilities Trade payables Taxation 700 500 600 100 700 4. Ace sold inventories at a price of RM300.500 1. At the date of the acquisition.CONFIDENTIAL DAC3043 Statement of Financial Position As at 31 December 2010 Ace RM’000 1.900 1. the book values of Diamond’s net assets reflected their fair values. The amount paid by Diamond is included in its administration expenses.000.000. These goods were sold at a mark up of 20%. Ace acquired 150.400. (ii) (iii) (iv) (v) DAC3043 ADVANCED ACCOUNTING II 5/10 .000 per annum.430 800 800 350 120 50 520 1. Ace charged Diamond for consultancy services of RM30. Goodwill is not impaired.725.430 150 20 170 1.500 1.900 200 30 230 2.300 1.320 Additional information: (i) On 1 January 2010 Ace acquired 80% of the shares in Diamond for RM1.5 3. Diamond still had half of the goods in its inventory.000 ordinary shares of Star for the price of RM400.
800 600 600 1.000 of the issued ordinary shares of Riverview Berhad.CONFIDENTIAL Required: Prepare the following financial statements for Ace Group: i.00 (market value RM2. Shown below are the financial statements of Grandis and Riverview. (6 marks) Consolidated Statement of Financial Position as at 31 December 2010.200 600 1. 3.50) to acquire 475.500 (700) 800 Riverview RM’000 2.000 ordinary shares with par value of RM1. (14 marks) ii.1.700 Net current assets DAC3043 ADVANCED ACCOUNTING II 6/10 .200 500 1.800 Riverview RM’000 500 600 600 1.200) 800 (200) 600 Revenue Expenses Profit before tax Taxation Profit after tax Statement of Financial Position as at 31 December 2010 Grandis RM’000 600 400 800 1.700 Ordinary shares of RM1 each Retained profit as at 1.500) 1. The statement of financial position of Grandis does not as yet reflect the acquisition of Riverview.2010 Profit for the year Non current assets Land Other non current assets 700 500 1.000 (1. Statement of Comprehensive Income for the year ended 31 December 2010 Grandis RM’000 5. On 1st April 2010 Grandis Berhad issued 500.000 (3. DAC3043 Consolidated Statement of Comprehensive Income for the year ended 31 December 2010.
2010 was RM650. Required: Prepare the following financial statements for Grandis: (a) Statement of Financial Position as at 31 December 2010. (7 marks) (c) DAC3043 ADVANCED ACCOUNTING II 7/10 . (5 marks) (b) Consolidate Statement of Comprehensive Income for the year ended 31 December 2010. (3 marks) Consolidated Statement of Financial Position as at 31 December 2010. Assume that profits accrue evenly throughout the year.4.000.CONFIDENTIAL Additional information: (i) (ii) (iii) DAC3043 The fair value of the land of Riverview on 1. Goodwill is not impaired.
000 12.000.000 8.000 100.000 82.000 5.000.000.000 150.000 36.000 25. due November 2010 Additional information: (i) The land is appraised at RM28.000 114. DAC3043 ADVANCED ACCOUNTING II 8/10 .CONFIDENTIAL 4. DAC3043 Given below is the Statement of Financial Position of Forest Berhad as at 31 December 2010: Forest Berhad Statement of Financial Position as at 31 December 2010 RM 50.000 28.000) 80. The machinery and equipment have salvage value of RM15.000.000 Patents Investment in ABC Sdn Bhd at cost Land Buildings Machinery & equipment Inventory Trade receivables Cash and bank balance Ordinary shares of RM1 each Accumulated losses Trade payable Salaries and wages payable Taxes payable Bank loan Mortgage payable 8% Notes payable.000 26.000 355.000.000.000 355.000 (82.000 (v) (vi) (vii) Collectability 100% 50% Uncollectible (ii) (iii) (iv) Inventory has a net realizable value of RM28.000 64. ABC Sdn Bhd shares have a current market value of RM11. The buildings are estimated to have a current market value of RM92.000 15.000 2. The unrecorded accrued interest on mortgage payable is RM3.000 2. Patents have no realizable value. The bank loan is secured by the shares. Both land and buildings were pledged for the mortgage payable and its accrued interest. Trade receivables are estimated to be collected according to the following schedule: Value (RM) 19.
DAC3043 ADVANCED ACCOUNTING II 9/10 . Trial Balance Dr RM’000 7% Preference shares of RM1 each Ordinary shares of RM0. but a bill has not been submitted.0 63.0 429.000.6 25.0 96.4 130.100 Trutone Bhd suffered a huge losses and decided to undergo an internal reconstruction.902.6 1.50 each RM’000 300 2.2 Authorized capital 7% preference shares of RM1 each Ordinary shares of RM0. (16 marks) (b) 5. Required: (a) Prepare a Statement of Deficiency for Forest Berhad as at 31 December 2010. (4 marks) Prepare a Statement of Affairs for Forest Berhad as at 31 December 2010. Given below are the balances which were extracted from the books of Trutone Bhd as at 30 June 2010.8 1.CONFIDENTIAL (viii) (ix) (x) DAC3043 The audit fee for the year ended 31 December 2009 was RM5.0 230.0 297.2 367. Liquidation expenses are estimated at about RM12.2 2. Salaries and wages are for 10 employees for the past 2 months.200.0 200.0 220.2 200.0 1.000.6 42.902.50 each Share premium Profit and loss 10% Debentures Plant and machinery (net book value) Fixtures and fittings (net book value) Motor vehicles (net book value) Goodwill Trademark Inventory Trade receivables Cash in hand Trade payables Bank overdraft Cr RM’000 300.
(6 marks) (b) END OF QUESTION PAPER DAC3043 ADVANCED ACCOUNTING II 10/10 . The following information is provided in respect of the company’s inventory: Cost RM297.75 each.000 ordinary shares of RM0.000 Fixed assets to be increased by the following amount: Plant and machinery RM90.CONFIDENTIAL Additional information: DAC3043 The capital reduction scheme as approved by the Court was as follows: (i) (ii) Preference shares to be reduced to RM0.30 each.40 per share payable in cash. The adverse balance in profit and loss account and all intangible assets are to be written off.800 was paid for reconstruction expenses The debenture holders to convert their loan into 600.000 5% debentures to be issued at par. (iii) (iv) (v) (vi) (vii) (viii) (x) (xi) Required: (a) Prepare the journal entries (without narration) to give effect to the above scheme. Ordinary shares to be reduced by RM0. Another special resolution was passed to restore the authorized capital. RM50.000 RM6.20 each.400 Net realisable value RM292. All bank balance will be utilized to settle part of the trade payables. The bank overdraft to be paid off out of the proceeds from the issue.000 Fixtures and fittings RM13. (14 marks) Construct the Statement of Financial Position of Trutone Bhd immediately after the capital reduction. Any remaining balance in the trade payables account will be settled via issuance of sufficient new ordinary shares at par. The existing ordinary shareholders to subscribe for a new issue of shares on the basis of one for every 20 shares held at a price of RM0.
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