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Solution Far610 - Jan 2018
Solution Far610 - Jan 2018
Solution Far610 - Jan 2018
QUESTION 1A
a) Compute the goodwill/bargain purchase on acquisition of Mentarang Bhd and Lokan Bhd.
FV of NA Acquired
Share capital 156,000.00/
Retained earning 50,000.00/
Share premium 23,000.00/
ARR Land 5,000.00/
ARR Licence 3,000.0/ (237,000.0)
Goodwill from OS 14,100.0
Impairment (3,000.0) (3,000.0)
Goodwill as at YE 11,100.0 11,100.0
Preference shares 60,000.0
Lokan
1/4/17 OS
Consideration Cash 8,500.0 /
(75000*1.20) Issue share 90,000.0 //
For OS + PS 98,500.0
PS (30,000.0)/
NCI (Fair value) 25,000.0 / 25,000.0
93,500.0
FV of NA Acquired
Share capital 80,000.0 /
RE b/d 18,000.0 /
CY before DOA (2,625.0)/
10.5*3/12 (95,375.0)
Goodwill from OS (1,875.0)
Impairment -
Bargain Purchase (1,875.0) 1,875.0
Preference shares -
(18/ x ½ = 9 marks)
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FAR610 – JAN 2018
(8/ x ½ = 4 marks)
c) Prepare the consolidated statement of profit or loss and other comprehensive income for the
year ended 31 December 2017.
KUPANG BHD
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
Group
RM' 000
Revenue (355.5+200.5) / +(105*9/12) / -10 / -7 / 617,750.00
Cost of Sales (210+112.5)/ +(70.5*9/12) / -10 / +1.2 // -7 / +0.375 // (359,950.00)
Gross profit 257,800.00
Loss on sale of assets 1-1 -
Investment income 6.225 / - 6.225 / (0.75*0.07*120*3/4) -1.5 (0.00)
Admin expenses (31.5+29.5) / +(19.5*9/12) / +0.1 / (under depn) (75,725.00)
Selling expenses (26.5+15.7) / +(18*9/12)/ (55,700.00)
Impairment of goodwill / (3,000.00)
Bargain purchase / 1,875.00
Share of profit from associate 6/12*11000*0.3 // 1,650.00
Impairment of intangibles 3/5 // (600.00)
-
Profit from operations 126,300.00
(5.5+6.3)/ + (7.5*9/12) / -(0.75*0.07*120*3/4) / +
Finance cost (13,225.00)
(0.25*0.07*120*1/4)//
Profit before taxation 113,075.00
Taxation (15.9+7.5)/ (23,400.00)
Profit for the year 89,675.00
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FAR610 – JAN 2018
(42/ x ½ = 21 marks)
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FAR610 – JAN 2018
d) Prepare the consolidated statement of changes in equity for the year ended 31 December
2017.
KUPANG BHD
GRE NCI
RM'000 RM'000
Balance brought down W1 160,605.00 132,570.00 W2
Acquisition of subsidiary / 25,000.00/ Q1A (a)
Changes in shareholding in subsidiary / 18,500.00 (48,500.00)/ Q1A (b)
Profit for the year / 88,225.00 1,450.00
(16/ x ½ = 8 marks)
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FAR610 – JAN 2018
KUPANG BHD
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017
RM' 000
Assets
Non-Current Assets
Property, plant and equipment (450+352.5+160) / +5/ +1/ -0.1/ 968,400.00
Investments -
Intangible assets (5.5+1.5+4.5)/ +3/ -(0.6 +0.6)/ 13,300.00
Investment in associate 9 / + (6/12*11000*0.3)/ 10,650.00
Goodwill on consolidation/ 11,100.00
Current Assets
Inventories (36.5+45+30.5)/ -1.2/ -0.375/ 110,425.00
Trade receivables (22.5+38+34)/ -6/ -5.25/ 83,250.00
Bills receivables (15.5+24.5+12) 52,000.00 /
Bank (30+26.5+0.8) 57,300.00 /
Total 1,306,425.00
Equity and Liabilities
Equity
Share capital 476/ + 20/ +75/ 571,000.00
Share premium 45/ +10/ +15/ 70,000.00
Retained earnings / 247,830.00
Non-controlling interests / 106,720.00
Non-current Liabilities
Debentures 120*0.25 / 30,000.00
Bank loan (40+71) / 111,000.00
Current Liabilities
Trade payables (32.5+30+31.5)/ - 6/ -5.25/ 82,750.00
Bills payables 24.5+15.5+19.5 59,500.00 /
Accruals 4.5+3+3.8 11,300.00/
Interest payables 120*0.07*1/4*0.25 525.00/
Dividend payables 15 / +(8*0.1)/ 15,800.00
Total 1,306,425.00
(36/ x ½ = 18 Marks)
Total: 60 marks
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FAR610 – JAN 2018
QUESTION 1B
a. Swfit Bhd’s ability to appoint or remove/ the majority of the board of directors of Exora Bhd
gives it the power to determine Exora Bhd’s financial and operating policies/. Even though
its ownership is only 40% of the equity, but with the ability to direct business activities of
Exora Bhd gives Swift Bhd obtained control/ over Exora Bhd.
(3/ X 1 = 3 Marks)
b. In assessing whether Pesona has obtained control over Mark, Pesona should be considered
not only the 35% shares it owns but also its option to acquire another 20% shares (a so-
called potential voting right/) in the next 12 months. The specific terms and conditions of the
option agreement and other factors are also to be considered:
• the options are currently exercisable and there are no other required conditions
before such options can be exercised, /
• If the option is exercised, these options would increase Pesona’s ownership to a
controlling interest of over 50%, /
• In the event of the other shareholders also have potential voting rights, if all options
are exercised, whether Pesona will still own a majority. /
By considering all the above factors, Pesona concludes that with the acquisition of the 35%
shares acquired plus with the potential voting rights, it has obtained control/ of Mark.
(5/ X 1 = 5 Marks)
c. Huawy Bhd pays consideration to Abata to obtain control in MSI and Mate. Prior to the
reorganisation, each company was controlled directly/ by Abata, However, after the
reorganization exercise, although MSI and Mate are now directly owned by Huawy, all three
companies are still ultimately/ owned and controlled by Abata, i.e Abata still has direct
interest in Huawy/ and indirect interest in MSI (72%/ instead on 80%) and Mate (63%/
instead of 70%). From the perspective of Abata, there has been no change/ as a result of
the reorganization, only the changes on direct and indirect interest in respective companies.
Holding company of MSI and Mate is Huawy but ultimate holding company for MSI
and Mate is Abata.
(5/ X 1 = 5 Marks)
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FAR610 – JAN 2018
QUESTION 2
RM’000 RM’000
SALE PROCEEDS - cash 45,000
NCI 25% x 43000 10,750√
10√ X ½ = 5 marks
Adjustment:
Depreciation 14,200√
Gain on disposal of subsidiary (7,500)√
Gain on disposal of land (10,300)√
Loss on disposal of investment 3,600√
Impairment on goodwill 2,000√
Impairment on associate 2,800√
Share of profits of associates (33,300)√
Impairment on development cost 3,500√
Finance cost 3,000√
95,500
Changes in working capital
Increase in inventories (55-45.5)+26.4 (35,900)√√√
Increase in accounts receivable (43-30)+17.3 (30,300)√√√
Increase in accounts payable (21.3-28)+15.5 8,800√√√
Cash generated from operations 38,100
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FAR610 – JAN 2018
40√ x ½ = 20 marks
Working
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FAR610 – JAN 2018
Goodwill NCI
b/d 26,250 Impair 2,000 Dividend 6,150 b/d 18,500
Sub 5,250 Disp Sub 10,750 PAT 19,400
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FAR610 – JAN 2018
Bank 18,500
c/d 26,500
36,000 36.000
-
END OF SOLUTION
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