Additional information

1. On July 2022, Nani Sdn Bhd was take over all assets of Nini Sdn Bhd (excluding
bank, investment) and liabilities (except trade payable and bank overdraft)
2. Consideration transferrable for the absorption of Nini Sdn Bhd was at follows :
I. 1,000,000 ordinary share in Nani valued at RM1.00 per share
II. 10% debentures will be convert to 12% debentures at premium RM150,000
III. A cash payment of RM0.50 for every one ordinary share held.
IV. 500,000 units of 8% Preference Share at RM0.50 each.

3. The assets of Nini Sdn Bhd were revalued as follows:

I. Property RM 140,000
II. Plant and machinery RM 1,400,000
III. Inventories RM 300,000
IV. Trade receivable RM 220,000
V. Bill receivable RM 100,000
VI. Bill payables RM 270,000

4. Nini Sdn Bhd would pay its own liquidation expenses amount RM5,000
5. Nani Sdn Bhd made an additional issue of 400,000 ordinary shares at RM1.00 each
to provide additional working capital.
6. Settlement of trade payable and bank overdraft is settled by bank.
7. Investment sold with loss RM10,000 and settled by bank.
X Berhad – Nani Sdn Bhd
Y Berhad – Nini Sdn Bhd

consideration transferred
Ordinary Share 1,000,000
Bank 500,000
12% Debentures 150,000
8% Preference Share 250,000
1,900,000

NATO at FV
Property 140,000
plant and machinery 1,400,000
inventories 300,000
trade receivable 220,000
bill receivable 100,000
bill payables -270,000
1,890,000
Goodwill 10,000

Realisation
property 75,000 bill payables 270,000
plant and machinery 1,200,000 Nani Sdn Bhd 1,900,000
intangibles 60,000
inventories 250,000
trade receivables 170,000
bill receivables 45,000
debentures holder 50,000
bank- liq expenses 5,000
investment 10,000
sundry's member – preference
share 50,000
sundry's member 255,000

2,170,000 2,170,000

Nani Sdn Bhd

Realisation 1,900,000 Sundry's member 1,000,000
Bank 500,000
12% Debentures 150,000
8% Preference Share 250,000
1,900,000 1,900,000
 Debentures's holder
12% Debentures 150,000 10% Debentures 100,000
Realisation 50,000
150,000 150,000

sundry's member
Ordinary Preference Ordinary Preference
Share Share Share Share
Nani sdn Bhd 1,000,000 250,000 Ordinary Share 900,000
Bank 620,000 7% Preference Share 200,000
Revaluation Reserves 150,000
Retained Profits 315,000
Realisation 255,000 50,000
1,620,000 250,000 1,620,000 250,000

Bank
Bal b/d 205,000 sundry's member 620,000
Nani Sdn Bhd 500,000 Realisation - liq exp 5,000
investment 370,000 Trade payable 440,000
Bank overdraft 10,000
1,075,000 1,075,000

investment
Bal bd 380,000 Bank 370,000
Realisation 10,000
380,000 380,000
 Business Purchase Account
Bill Payables 270,000 Property 140,000
Nini Sdn Bhd 1,900,000 plant and machinery 1,400,000
Inventories 300,000
Trade Receivable 220,000
Bill Receivable 100,000
Goodwill 10,000
2,170,000 2,170,000

Nini Sdn Bhd

Business Purchase
Ordinary Share 1,000,000 Account 1,900,000
Bank 500,000
12% Debentures 150,000
8% Preference Share 250,000

1,900,000 1,900,000

Ordinary Share
Bal cd 2,618,000 Bal bd 1,218,000
Nini Sdn Bhd 1,000,000
Bank 400,000

2,618,000 2,618,000

Bank
Bal bd 340,000 Nini Sdn Bhd 500000
Ordinary Share 400000 Bal cd 240000

740000 740000
 Dr Cr
JOURNAL ENTRIES FOR SELLER BOOKS RM RM

1. Consideration Transferrable
Nani Sdn Bhd 1,900,000
Realisation 1,900,000

2. Assets Taken Over

Realisation 1,740,000
Property 75,000
Plant and Machinery 1,200,000
Inventories 250,000
Trade Receivable 170,000
Bills Receivable 45,000

3. Intangible Assets written off

Realisation 60,000
Intangible 60,000

4. Transfer of balance to Preference Shareholders

7% Preference Share Capital 200,000
Sundry members - 7% preference shareholders
200,000

5. Transfer of equity
Ordinary Share Capital 900,000
Retained Profits 315,000
Revaluation reserve 150,000
Sundry members - ordinary shareholders 1,365,000

6. Profit on realisation for Ordinary Sundry Members

Realisation 305,000
Sundry members- ordinary 305,000

7. Settlement of amount due to Preference Shareholders

Sundry Members - Preference Shareholders 250,000
7% Preference Shares in Nini Bhd 250,000
8. Settlement of amount due to Ordinary Sundry
Members
Sundry Members - Ordinary Shareholders 1,000,000
Ordinary Shares in Nani Sdn Bhd 1,000,000

9. Settlement of amount due to Debentures holder

10% Debentures in Nani Sdn Bhd 100,000
Realisation 50,000
12% Debentures 150,000

10. Liquidation expenses paid by seller

Realisation account 5,000
Bank 5,000

11.Liabilities Taken Over

Bills payable 270,000
Realisation 270,000
 Nani Sdn Bhd
Statement of Financial Position as at 30 June 2022

Non-current Assets
Property 640,000
plant and machinery 2,960,000
goodwill 10,000
intangible 45,000
investment 390,000
4,045,000

Current Assets
inventories 640,000
trade receivable 327,000
bill receivable 160,000
Bank 240,000

1,367,000
5,412,000

Equity and liability

Ordinary Share 2,618,000
Revaluation Reserve 195,000
Retained Profit 535,000
8% Preference Share 250,000
7% Preference Share 250,000
3,848,000
Non-Current Liability
10% Debentures 250,000
12% Debentures 150,000

Current Liability
Bill Payables 615,000
Trade Payable 54,2000
Bank Overdraft 7,000
5,412,000