UKAF3073 Corporate Reporting (May 2020)

TUTORIAL 6 - SOLUTIONS

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CSOFP) – Part 2

Solutions

Question 1 (Q10.11)
UKAF3073 Corporate Reporting (May 2020)

Question 2 (Q11.5)
UKAF3073 Corporate Reporting (May 2020)

Question 3 (Q11.7)

Journal entries for Debenture Interest

D
r SOPL (Park) RM5,000  
RM2,75
Cr Debenture Interest Payable   0
RM2,25
SOPL (May)   0

   

Journal Entries for RPS Dividends    

D
r SOPL (Park) RM10,000  
RM7,00
Cr RPS Dividend Payable   0
RM3,00
SOPL (May)   0
UKAF3073 Corporate Reporting (May 2020)

W1- Computation of Goodwill      

          RM   RM

Consideration Transferred (135k +33k x3)     234,000

NCI (RM300,000 x 10%)     30,000

      264,000

Share capital 230,000    

Retained Profit 30,000    

FV adjustment - Intangible assets 40,000   300,000

Bargain Purchase           (RM36,000)

     
W2- Group Retained Earnings      
          May   Park
Balance as 1 Jan   50,000   30,000
For the year   40,000   50,000
        -30,000
              50,000
Debenture Interest           -5,000
RPS Dividend           -10,000
Additional Depreciation
(RM40K/4)       -10,000
Share of subsidiary' profit
90% x 25K   22,500
  25,000
Debenture Interest   2,250
   
RPS Dividend   3,000
   
Bargain Purchase (w1)   36,000
   
         
          153,750    

W3- NCI  
At acquisition (w1) 30,000
Post-acquisition profit  
(25,000 x 10%) 2500
32,500
UKAF3073 Corporate Reporting (May 2020)

Consolidated Statement of Financial Position of May

and Park as at 31 December x7      
     
Sundry net assets(680000+510000)     1,190,000
Intangible assets (RM40000 - RM10000)     30,000
Total assets     1,220,000
   
Ordinary Share (800k + 33k x 3)     899,000
Grp Retained Profit (W2)        153,750
Non -controlling Interest (W3)        32,500

10% Redeemable Preference Shares (100k x 70%)     70,000

10% Debentures (100 x 55%)     55,000
Debenture Interest Payable (5,000-2250)     2,750
RPS Dividend Payable (10,000 -3,000)     7,000
    1,220,000
UKAF3073 Corporate Reporting (May 2020)

Question 4 (Q10.16) [Self-learning]

W
1 Group Structure

Rojak

Salad
75% Juice 80%

W
2 Draw up a proforma consolidated financial statement

Conso
    Rojak Salad Juice adj adj l
RM'00 RM'00 RM'00 RM'00 RM'00 RM'00
  0 0 0 0 0 0
Ordinary shares 3400     600   4,000
Preference shares 500       500
Retained profit ( w4) 500       695
Revaluation reserves ( W5)       200 200
NCI ( w 5)         1145
Liabilities current a/c          
- Salad 80     (80)   0
- Juice 100 60   (60) -100 0
Trade Payable 190 80 220 (29)   461
Deferred payment         440
  4770         7441
           
Land at cost 1000 1000 1200 200 250 3950
        300    
Other non-current assets 400 1000 700   2100
UKAF3073 Corporate Reporting (May 2020)

Investment in subsidiaries          
Salad - 1.2 m ordinary shares 2000        
Juice - 800,000 ordinary
shares 800        
Goodwill ( w2)         280
Inventory 160 30 40   230
T. receivable 280 150 80 (29)   481
Current a/c Rojak   90 100 (80) -100 0
        -10  
Salad     70 (60) -10 0
Bank 130 170 80 20   400
               
4770 2440 2270     7441

W
3 Goodwill computation Salad
    RM'000 RM'000
Consideration   2000
NCI-25% x 2,400   600
    2600
Less: Net assets as acquisition date    
Shares capital 2000  
Pre-acquisition profit 200  
Fair value adjustment - land 200 (2400)
     
Goodwill     200

      Juice
  RM'000 RM'000
Consideration- 85%    
- cash   800
- deferred payment   400 Deferred payment

- New shares ( 150k x $4)   600

NCI-20% x 2,150   430 Dr. COI 400

    2230 Dr. GRE- fin chgs 40

Less: Net assets as acquisition date    

440
Shares capital 1800   Cr. Deferred Pymt
Pre-acquisition profit 50  
Fair value adjustment - land 300 (2150)
     
UKAF3073 Corporate Reporting (May 2020)

Goodwill     80

W
4 Group Retained Earnings
    Rojak Salad Juice
    Rm'000 Rm'000 Rm'000
Retained profits   500 300 250
Less; pre-acquisition profit   (200) (50)
    100 200
Share of subsidiaries ' profit   75% 80%
- Salah ( 100 x 75%)   75    
- Juice ( 200 x 80%)   160    
       
Finance charges   (40)    
    695    

W Non-controlling Interest
5 (NCI)
Salad Juice
RM'00 RM'00
      0 0  
At acquisition ( from W3)   600 430  
Post- acquisition profit        
- 100 x 25%   25    
- 200 x 20%     40  
Revaluation of land (1.75m-1.5m) x 20%   50  
Total     625 520 1145