The followings are Statement of Financial Position of Harry Bhd and its subsidiary, Suci Bhd asat 31 December 2017.HarryRM'000SuciRM'000Non-current assetsLand and buildingPlant and equipment412,000180,000633,200127,800Investment in Suci:320 million Ordinary shares at cost40 million 10% Preference shares650,00040,000RM20 million 10% Debentures20,000Current assetsInventories50,00040,000Loan to Suci15,000Trade receivables45,00040,50063,0001,475,00024,000865,500BankTotal AssetsEquity and liabilitiesOrdinary shares RM1 each200 million 5% Preference shares800,000200,000400,000100 million 10% Preference sharesShare premiumRetained earnings10% Debentures100,000151,000100,000202,00080,000170,00050,00013,0002,500Loan from HarryDebenture interest payablesTrade payablesTotal equity and liabilities4,00038,00030,0001,475,000865,500Additional information:1. Harry Bhd. acquired the shares and debentures in Suci Bhd on 1 January 2015 when theretained profit and share premium of Suci Bhd. was RM 50,000 and RM 100,000respectively. The purchase consideration was made up of the followings:i. An immediate cash payment of RM650 million.ii. A deferred payment of RM22 million if the profits of Suci Bhd. increase by 20% over thenext year. iii.Harry Bhd.'s cost of capital is 10% per annum and Harry Bhd. has only recorded the cashconsideration of RM650 million.2. On 1 January 2015, the fair value of the land of Suci Bhd. was 50% more than the carryingamount of RM100 million. No changes have been made in the financial statements of SuciBhd. regarding the fair value adjustment. This land still remains in Suci Bhd. and the fairvalue of the land was RM 200 million at 31 December 2017. Meanwhile, the fair value of theland of Harry Bhd. was RM 20 million higher than its carrying amount as at 31 December2017. The deferred tax liability on revaluation surplus is to be recognized at 5%.3. During the current year, Harry Bhd. sold a plant costing RM10 million for RM12 million toSuci Bhd. The remaining life of the plant is 10 years and it is depreciated using straight linemethod.4. During the year ended 31 December 2017, Suci Bhd. sold goods valued at RM18 million toHarry Bhd. and RM8 million of these goods still remain in the Harry Bhd.'s premise. Thepolicy of Suci Bhd. is to sell trading inventories to Harry Bhd at cost plus 25%.5. Trade receivables of Harry Bhd. include RM22 million due from Suci Bhd.6. On 25 December 2017, Suci Bhd. remitted RM2 million on account of the loan. However,Harry Bhd. has not recorded the remittance yet.7. The debenture interest payables are for second half year and Harry Bhd. has not recorded itsdebenture interest due from Suci Bhd.Required:a. Measure the amount of goodwill on consolidation (non-controlling interest is measured at thefair value of net assets).b. Prepare the Consolidated Statement of Financial Position of the group as at 31 December2017.

Consolidated financial statement can be defined as the combined financial statement prepared by the…

a. Measure the amount of goodwill on consolidation (non-controlling interest is measured at the fair value of net assets). b. Prepare the Consolidated Statement of Financial Position of the group as at 31 December 2017.

a. Measure the amount of goodwill on consolidation (non-controlling interest is measured at the fair value of net assets). b. Prepare the Consolidated Statement of Financial Position of the group as at 31 December 2017.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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