Question 3 Following are the balances sheets for Tulip and Ros as at 31.12.

08

Balance sheet as at 31.12.08 Tulip RM Ordinary shares of RM1 each 8% Preference shares of RM1 each 9% Preference shares of RM1 each Share Premium General Reserves Profit and Loss account 9% Debenture 10% Debenture Current Liabilities : Debenture interest payable Creditors Loan from Green Billpayable 650,000 120,000 100,000 80,000 79,800 130,000 Ros RM 400,000 98,000 70,000 56,000 88,680 100,000

10,000 44,300 13,000 30,000 20,000 1,251,500 899,980 312,000 273,100 400,000 50,000 30,000 489,700 246,780

11,700 50,000

Land and Building Plant and Machinery Investment in Tulip : 236,000 ordinary shares 34,300 preference shares RM30,000 10 % Debenture Current Assets Inventories Loan to Ros Bill receivable Debtors Bank

50,000 45,740 15,000 34,800 24,670 33,400 44,210 53,200 48,880 1,251,500 899,980

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Additional information : 1. Tulip acquired the shares and Debenture of Ros on 1.1.06 when the share premium, General Reserves and profit and loss account were RM80,000, RM30,000 and RM 40,300 respectively. 2. On the date of acquisition, Ros declared and paid an ordinary dividend of 8%.tulip received its share of this dividend which was credited to profit and loss of Ros. 3. The land and building of Ros were revalued to RM610,000 ( on the date of acquisition). Ros did not adjust its books to reflect the new values.Depreciation policy of the group was at 15% per year. 4. Tulip had sold inventories at cost plus 50%.Tulip sold inventories for Rm30,000 and RM18,000 of these inventories still remain unsold by Ros on 31.12.08 5. Ros sold to Tulip plant and machinery of book value RM50,000 for RM60,000.The remaining useful life of the plant and machinery on the date of sale was 5 years using straight line method. 6. Debtors of Tulip include RM6,000 due from Ros.Ros has remmited RM4,000 but Tulip received them on January 09. 7. Bill payables of Ros of Rm10,000 were drawn in flavour of Tulip,and Tulip has discounted RM4,000 of them. 8. The director of Ros have also declared an ordinary shares dividend at 10% for the year 08, which has not been recorded yet. You are required to prepare : Consolidated balance sheet of Tulip and of its subsidiary as at 31.12.08

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Answer :

Investment : Ordinary share Preference share Debenture

Cost Of Control Account RM Ordinary share 400,000 Preference share 50,000 30,000 Debenture Share Premium General Reserve Profit and Loss Revaluate : Land and building Dividend Goodwill

RM 236,000 34,300 30,000 47,200 17,700 4,897 70,797 18,880 20,046 480,000

480,000

Minority Interest Account RM Profit and Loss Consodilated Balance Sheet 6,337 322,346 Ordinary share Preference share Share Premium General Reserve Revaluate : Land and building 328,683

RM 164,000 63,700 28,700 22,960

49,323 328,683

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Cost Of Control Account Dividend : Ordinary share

Profit and Loss Account Subsidiary RM 4,897 Balance forward

RM 88,680

40,000

Minority Interest Profit and loss : Consolidated

6,337 14,015

Depriciation Unrealised Profit

54,135 10,000

109,032

109,032

Profit and loss : subsidiary Unrealised Profit Dividend Consolidated Balance sheet

Consolidated Profit and Loss Account RM Profit and loss 14,015 H 6,000 Depriciation 18,880 Dividen 69,505 Debenture

RM 79,800 2,000 23,600 3,000

108,400

108,400

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Consolidated Balance sheet as at 31.12.08 RM Land and building 867,865 Plant and machinery 511,880 Inventories 89,740 Loan 2,000 bill receivable 53,470 Debtor 71,610 bank 102,080 goodwill 20,046 1,722,691 Ordinary share Preference share Share premium General reserve Profit and loss 9% debenture 10% debenture Debenture interest Creditor Bill payable Minority interest Dividen 650,000 120,000 94,100 95,340 69,505 130,000 70,000 18,700 92,300 44,000 322,346 16,400 1,722,691

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja