b. Kim and Liang incorporated Musang King Sdn Bhd on 1.4.2016 to acquire durian plantations in Gua Musang, Kelantan. The company acquired several pieces of agricultural land at RM2 million and embarks on durian plantation. The land acquisition is financed by share capital as follows: Kim (30%) Liang (70%) On 1.1.2020, Kim wishes to dispose the shares to Pink at a consideration of RM1.8 million, based om market value of the durian plantation of RM 6 million. Required: i) RM'000 600 1,400 2,000 ii) Advise the tax implication on the disposal of shares to Pink. (Include computation of disposal of RPC shares that subject to RPGT) Advise Pink on the RPGT responsibility towards the acquisition of shares.

b. Kim and Liang incorporated Musang King Sdn Bhd on 1.4.2016 to acquire durian plantations in Gua Musang, Kelantan. The company acquired several pieces of agricultural land at RM2 million and embarks on durian plantation. The land acquisition is financed by share capital as follows: Kim (30%) Liang (70%) On 1.1.2020, Kim wishes to dispose the shares to Pink at a consideration of RM1.8 million, based om market value of the durian plantation of RM 6 million. Required: i) RM'000 600 1,400 2,000 ii) Advise the tax implication on the disposal of shares to Pink. (Include computation of disposal of RPC shares that subject to RPGT) Advise Pink on the RPGT responsibility towards the acquisition of shares.

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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On 1 July 2015, Ausra purchased 75% of Danute by way of a share exchange of two new shares in Ausra for every three purchased in Danute plus an immediate cash payment of $11,160,000. Ausra’s share price at the acquisition date was $4.70. Only the cash element of the consideration has been recorded. On the same date, Ausra purchased $5,000,000 of Danute’s 10% loan notes at par. The summarised financial statements of both companies are as follows: Statement of Comprehensive Income for the year ended 31 December 2015 Ausra Danute $ 000 $ 000 Revenue 120,000 48,000 Cost of sales (84,000) (40,000) Gross profit 36,000 8,000 Operating expenses (11,900) (400) Profit from operations 24,100 7,600 Other income 300 - Finance costs - (1,200) Profit before tax 24,400 6,400 Income tax expense (6,000) (1,200) Profit for the year 18,400 5,200 Statements of Financial Position at 31…
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