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July 22 Far620
July 22 Far620
QUESTION 1 (PART A)
PART A
PSC 9.000V
Karangan Bhd
CT 60,000V-(20%x10mxRM2) v 56.000
NCI 40%vx79.700 31,880 31,880
87,880
FVNA @ DOA
OSC 70,000
RE 4.700
OCE 5.000 79,700
To CSOFP 8,180
Dublin Bhd
CT 24,000
FVNA @DOA
OSC 60,000
RE 3,500 v+1625V = 5,125
(6.500x3/12)
OCE 1,400
66.525 x 40% 26,610
Bargain Purchase 2,610
(24 x ½ = 12 marks)
b Gain or loss on disposal of shares in Mahang Bhd
Proceeds 20%vx(80%x60m)
x RM1.08V 10,368
FVNA @ DOD
FAR610/620 -JULY 2022
OSC 60,000 V
RE 2,800v
OCE 2,000v
ARR (1,500) V
63,300x16%V 10,128 10,128
Gain 240
(8 x ½= 4 marks)
c) Consolidated Statements of Profit or Loss of Kulim Bhd group for the year ended 31
December 2021.
RM'000
Revenues (36,000+30,000+25,900) V-1,800 V 90,100
Cost of Sales (8,300+6,600+5,900) N-1,800V +270 V (19,270)
Gross Profit 70,830
Investment income (300+400+440) -240v + 450v + 100v - 900
450V-100N
Other income (500+750+100) 1,350
Administrative expenses (12,200+9,000+6,400) (27,600)
S&D expenses (5,700+2,600+4,000) (12,300)
Bargain purchase - AC 2,610
Impairmernt (100)
Depreciation-plant 1,500/10 years 150
Share of profit in AC (6,500x9/12) x40% 1,950
URP (A) (50%x400x20%) x40% (16)
Finance cost (1,900-+2,050+1,240) (5,190)
Profit Before Tax 32,584
Taxation (2,200+2,800+2,300) (7,300)
Profit After Tax 25,284
Other Comprehensive Income
Gain on disposal 240
Revaluation surplus-land 700V
Total Comprehensive Income 26,224
W2 GRE W3 NCI
Kulim Bhd 6.000V
-) Impairment (200) V
5,800
Mahang Bhd 2,800 12,500
-) Pre (2,000)
+) Dep 150v
950 760 190
PSC-Mahang Bhd 9,000v
6,560 21,690
RM'000
Property, Plant &Equipment (49,000+80,000+78,900) V 205,400
1,500V+(150 x 2 = 300) V
2,000V+700V
Investment Propertyv 2,000
Intangibles (2,000+5,000+6,000) 26,880
V+3,700v+8,180V+2000V
Investment in Dublin Bhdv W4 28,304
Other investment (12,000+30,000+26,000) V 68,000
Inventories (2,300+3,300+4,200) v-270 V 9,530
FAR610/620 - JULY 2022
|W4 RM'000
Original cost 24.000
Share of profit 1,950
-) URP (16)
Bargain Purchase 2.610
-) Dividend (240)
28,304
(38 x ½ = 19 marks)
(Total: 60 marks)
PART B
MFRS 10 states that power arises when the investor holds, directly or indirectly the majority
of the voting rights.v However, investors may have power even though it holds less than the
majority of voting rights. One of the situations that permit this to occur is when the potential
rights exist. vTherefore, Radiant Age Berhad, which has a control of only 30%, which is less
than the majority of voting rights, has controlled Glitter Berhad on 1 January 2022. VThis is
because the option gives rise to potential rights if exercised , which may increase the
investor's voting power. Even the option that can be exercised in 40 days time did not stop the
investor from having the ability to direct the relevant activities of the investee v.
(5 marks)
(ii)
Pluto is an associate companyv of Venus Bhd because the shares acquired (30%) are more
than 20% but less than 50%
Any inter-company balances that arise from the transactions with associates must not be
eliminated on consolidation v because the items in the statement of financial position of the
associate are not consolidated.
FAR610/620 - JULY 2022
A loan from Pluto Bhd v should be separately disclosed in the consolidated financial
statement under liability. v
(5 marks)
(ii)
Matrix Bhd is an associate of Prestige (25% equity interest) V, therefore the financial
statement of Matrix Bhd will not be consolidated
the cost of investment in Matrix Bhd is initially recognised at cost V and the carrying
amount is increased decreased by the Prestige's share of the post-acquisition profit
and impairment of goodwill (RM3,000) V
the carrying amount of investment in Matrix Bhd is disclosed as anon-current assetV
(5 marks)
(Total: 15 marks)
QUESTION 2
Q2a)
When a subsidiary is acquired during the year,
the purchase consideration may include cash, which means there is a cash outflow. v
The asset of the subsidiary may include cash, which means there a cash inflow
The cash consideration paid will be set off against the cash balance (if any) in the
subsidiary on the acquisition date.
The net cash flow from the transaction will be disclosed as cash flow from investing
activity ( the acquisition of a subsidiary).
Any cash dividend received from the subsidiaries by the parent is not disclosed in the
statement of cash flow.
Dividend paid to NCI will be disclosed as a cash outflow from financing activities .v
5 marks
Q2 b)Pearl Bhd
Consolidated statement of cash flows for the year ended 31 December 2021
Cash Flows from Qperating Activities
Net Profit before tax 352,500 V
Adiustment
Depreciation on PPE 74,700vWWw
Impairment on goodwill 23,750 VV
Impairment on intangible assets 1,600V
Impairment on AC 5,600N
Finance cost 9,000N
Gain on sales of land (20,100) V
Share of profit of associate (99,900) v
347,150
Changes in working capital
Increase in Inventories (26,500)
Inc inTrade and other receivable (34,200)
5
FAR610/620-JULY 2022
40V x ½= 20 marks
Working: Goodwill
Workings:
PPE Long Term Borrowing
Bal b/f 504,000 Bal cf 700,800 Bal c/f 69,000 N Bal b/f 78,000
Disposal -
Bank 52,800 V Land 14,700v Bank 10,000 Sub 1,000 V
Bal b/f 72,000VBal c/f 95,400 Bal c/f 63,000 Bal b/f 55,500
bank - Bank -
patent 25,000 V Impairment 1,600 Dividend 53.200 Sub 2,500 V
PAT 58,200N
Interest payable
Bank 15,000 SOPL 9,000v Bal b/f 136500 Bal c/f 165000
Sub 2000v
Bank(Inc) 26500
Disposal of Land
7
FAR610/620 - JULY 2022
Tax payable
Bal c/f 37,500 Bal b/f 42,000 V Trade & Other Payable
Bank 84,000 SOPL 79,500V Bal c/f 120900 Bal b/f 121500v
Bank (dec) 1800 sub 1200V
| 122700 122700
Investment in AC
Bal b/f 102,000 Bal c/f 168.000
Share of
profit 99,900v impairment 5,600N
Bank -
Dividend 28,300