Consolidation SPL & OCI |9

CLASS EXERCISE 3A
CONSOLIDATION STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME

QUESTION 1

Honda acquired 45 million shares of Suzuki on 1 January 2020. The issued ordinary share capital of
Suzuki was 60 million shares at RM1 per share. On the acquisition date, the retained profit of
Honda and Suzuki was RM15million and RM10million, respectively.

Below are the Statement of Profit or Loss of Honda and its subsidiary, Suzuki, for the year ended 31
December 2020.

Honda Suzuki
RM’000 RM,000
Sales 130,000 150,000
Cost of sales (40,000) (50,000)
90,000 100,000
Operating expenses (40,000) (60,000)
50,000 40,000
Taxation (12,000) (9,600)
Profit after tax 38,000 30,400

Additional information:
i) There is no transaction between Honda and Suzuki (intragroup transaction) during the year
2020.
ii) Tax rate for the year 2020 is 24%.

Required:
a) Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income for
Honda Group Bhd for the year ended 31 December 2020.

b) What is the group retained profit at the end of the year 2020?

c) What is the balance for non-controlling interest at the end of the year 2020?
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QUESTION 2

On 1 January 2020, Hepi acquired 75 percent of the issued ordinary share capital of Suka The
ordinary share capital of Suka at this date was RM60,000,000. On the acquisition date, the retained
profit of Suka was RM10,000,000.

Below are the Statement of Profit or Loss of Hepi and its subsidiary, Suka, for the year ended 31
December 2020.

Hepi Suka
RM’000 RM,000
Sales 120,000 100,000
Cost of sales (50,000) (40,000)
70,000 60,000
Operating expenses (20,000) (20,000)
50,000 40,000
Taxation (15,800) (12,400)
Profit after tax 34,200 27,600

Additional information:
i) There is no intragroup transaction during the year.
ii) Retained profit at 1 January 2020 for Hepi was RM15,600,000.

Required:
a) Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income for
the year ended 31 December 2020.

b) Prepare the Consolidated Statement of Changes in Equity for the year ended 31 December
2020 showing the section for group retained profits and the non-controlling interest.

QUESTION 3

On 1 January 2017, L-Land acquired 60 percent of the issued ordinary share capital of W-Water,
which was RM60million. On the acquisition date, the retained profit of W-Water was RM25million.

Below are the Statement of Profit or Loss of L-Land and its subsidiary W-Water for the year ended
31 December 2020.

L-Land W-Water
RM’000 RM,000
Sales 120,000 100,000
Expenses (70,000) (60,000)
Taxation (10,000) (4,000)
Profit after tax 40,000 36,000

Additional information:
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i) Retained profit at 1 January 2020 for L-Land and W-Water are RM135million and
RM60million respectively.
ii) There is no intragroup transaction during the year.

Required:
a) Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income for
the year ended 31 December 2020.
b) Prepare the partial Consolidated Statement of Changes in Equity showing the Group’s
retained profit and the non-controlling interest at the year ended 31 December 2020.