Question 1

Ruby Bhd acquired 160,000 units of ordinary shares

issued by Emerald Sdn Bhd on 1 July 2020. The
consideration transferred include
a. Ordinary shares issued by Ruby of 1 share for 2
shares acquired.
b. Cash payment payable in 2 instalments
i. RM300,000 payable on 1 July 2020
ii. RM315,000 payable on 1 July 2021
Cost of capital is 5% per annum.
Total ordinary shares issued by Emerald S/B is 200,000
units. The prevailing market price was given as follows:
​ ​ ​1 July 2020 ​ ​ ​1 July 2021
Ruby ​ ​ ​RM 3.10/share ​ ​RM
3.15/share
Emerald ​ ​RM 1.80/share ​ ​RM 2.10/share

Extract of the statements of financial position as at 30

June 2021:
Ruby (RM) Emerald (RM)
Non-current assets 1,474,000 775,000
Current assets:
Trade receivables 1,030,00 60,000
Bank 720,000 45,000
Total assets 3,224,000 880,000

Ordinary share 1,280,000 360,000

Retained earnings b/f 764,000 370,000
Profit for the year 290,000 110,000
Trade payables 890,000 40,000
Total equity and liability 3,224,000 880,000
The group closes its accounts on 30 June.
Required
a. Prepare the journal entries to record investment in
Emerald Sdn Bhd
b. Calculate full goodwill for Emerald Sdn Bhd
c. Prepare the journal entries to record goodwill
d. Prepare journal entries to record cost of capital for
deferred payment on 30 June 2021
(11 marks)

a. DR Investment ​ ​848
CR ​ ​ ash
C ​ ​ ​300
CR ​ ​ eff payment
D ​ ​300
CR ​ ​ S
O ​ ​ ​248

b.
CT – OS (80,000units x RM3.10) ​= ​248,000
CT – Cash on acq ​ ​ ​ ​300,000
CT – Deff cash (300/1.05) ​ ​ ​300,000
+) NCI (40,000 units x RM1.80) ​ ​ 72,000
-) FVNA:
OS ​ ​ ​360,000
RE ​ ​ ​370,000 ​ ​(730,000)
​ ​ ​ ​ ​ ​190,000

c.
DR Goodwill ​ ​ 90
1
DR OS ​ ​ ​ 60
3
DR RE ​ ​ ​370
​CR Investment ​848
​CR NCI ​ ​ 72 ​

d.
DR cost of capital ​ ​15
​CR Deff payment ​ ​15

Question 2

Ferrero Bhd acquired control in Rocher Sdn Bhd on 1

July 2020. Extract of statements of financial position as
at 31 December 2020 for both Ferrero and Rochers are
as follows:
Ferrero (RM) Rocher (RM)
Investments in Rocher:
Ordinary shares (80%) 620,000
Preference shares (50%) 100,000
Debentures (20%) 20,000
Non-current assets 2,310,000 1,550,000
Current assets 1,300,000 340,000
Total assets 4,350,000 1,890,000

Ordinary shares 2,500,000 750,000

6% Preference shares - 200,000
Retained earnings 1,080,000 630,000
8% Debentures - 100,000
Liabilities 770,000 210,000
Total equity and liabilities 4,350,000 1,890,000

Additional Information
1. Ferrero acquired preference shares on 1 July 2020.
2. Debentures in Rocher was acquired on 1 January
2020.
3. In December 2020, Ferrero declared ordinary
shares dividends of RM60,000 whilst Rocher
declared second half year preference shares
dividends and full year debentures interest in the
same month. None of these dividends and interests
have been recorded.
4. Retained earnings for Rocher on 1 January 2020
was recorded as RM460,000.

Required

a. Determine the dividends/interest payable and

dividends/interest income given the information
above.
b. Explain debenture interest treatment when
consolidating the statement of financial position of
Ferrero and Rocher as at 31 December 2020.
c. Prepare the adjustment worksheet based on the
information given. Your answer must include total
NCI and GRE as at 31 December 2020.

(18 marks)

(a)
Rocher: ​ ​ ​ ​Accruals ​ ​Income
 ​ ​Conso
6% PS (6%/2 x 200,000) ​= ​ 000
6 ​ ​6000
x 50% = 3000 ​ ​3000
8% Debenture (8% x 100,000) = 8000 ​ ​8000
x 20% =1600 ​ ​6400

(b)
Eliminate debenture interest income for July 2020
onwards

(c) ​Adjustment WS
​ ​ ​ ​ ​ ​Working ​NCI ​ ​
GRE
NCI @ acq (750+**545) x 20% ​ ​ ​ ​259
Sub post RE (630-545) ​ ​ ​85
-) PS div accruals ​ ​ ​(6)
-) Deb int accruals ​ ​ ​(8)
​ ​ ​ ​ ​ ​71 ​ ​14.2 ​ ​5
6.8
Parent RE @ conso ​ ​ ​1080
-) OS div ​ ​ ​ ​ ​(60)
+) PS div income ​ ​ ​ ​3
+) Deb int
income ​ ​ ​1.6 ​ ​ ​ ​1024.6

Sub PS (200-i/co100) ​ ​ ​ ​ ​100

** RE @ 1.1.2020 ​ ​460
+) 6/12 x PAT(630-460) ​ 85
RE @ 1.7.2020 ​ ​545
 Question 3

The statements of financial position for LALA group as

at 30 September 2021 are as follows:
Lala (RM) Move (RM)
Investment in ordinary shares of Move 1,500,000
S/B
Non-current assets;
Land 3,800,000 850,000
Building 2,200,000 560,000
Plant 900,000 400,000
Machinery 700,000 120,000
Current assets 2,000,000 600,000
Total assets 11,100,000 2,530,000

Ordinary shares 6,000,000 1,000,000

Revaluation reserve 800,000 200,000
Retained earnings 3,100,000 710,000
Liabilities 1,200,000 620,000
Total equity and liabilties 11,100,000 2,530,000

Additional Information
1. Lala Bhd acquired 75% of ordinary shares issued
by Move S/B on 1 October 2020. All consideration
transferred has been recorded. On the acquisition
date retained earnings of Move S/B was at
RM500,000.

2. On 1 October 2020 the following information was

 derived on the fair value of non-current assets of
Move S/B:
Useful life Fair Value (RM)
Land - 1,000,000
Building 15 years 750,000
Plant 9 years 495,000
Machinery 7 years 105,000

Required

a. Determine the fair value adjustments as at

acquisition date.
b. Prepare the consolidated statement of financial
position for LALA group as at 30 September 2021.
Show ALL relevant workings.
(62 marks)

​ ​ V @
C ​ ​Depn ​ ​CV @ ​
​FV @ ​ ​ ​Depn
​ ​30.9.21 ​ 021
2 ​ ​1.10.20 ​1.10.20
Building ​560 ​ ​560/14 ​=40 ​600 ​
​750 = FVA 150 ​150/15 =10 ​

Plant ​ ​400 ​ ​400/8=50 ​450 ​ ​4

95 = FVA 45 ​ ​45/9 =5

Machinery ​120 ​ ​120/6 =

20 ​140 ​ ​105 ​= (FVA35) ​35/7 = (5)
Land ​ ​850 ​ ​- ​ ​850 ​ ​1000
= FVA 150 ​-
Goodwill answer Bargain purchase 7.5k
Adjustment WS
​ ​ ​ ​ ​Working ​NCI ​ ​GRE
​ ​GRR
NCI @ acq ​ ​ ​ ​ ​ ​502.5
Sub post RE (710-500) ​ ​210
-) depn building ​ ​ ​(10)
-) Depn plant ​ ​ ​ ​(5)
+) depn machinery ​ ​ ​5
​ ​ ​ ​200 ​ ​50 ​ ​150
P RE @ conso ​ ​ ​ ​ ​ ​ ​3100
P RR @
conso ​ ​ ​ ​ ​ ​ ​ ​ ​800
+) Bargain
purchase ​ ​ ​ ​ ​ ​ ​7.5_________
____
​ ​ ​ ​ ​ ​ ​552.5 ​ ​3257.5
​ ​800
Conso SOFP as at 30.9.21
Land (3800+850+FVA150) ​ ​ ​4800
Building (2200+560+FVA150-depn10) ​2900
Plant (900+400+FVA45-depn5) ​ ​1340
Machinery (700+120-FVA35+depn5) ​790
Curr assets (2000+600) ​ ​ ​2600
​ ​ ​ ​ ​ ​12,430
OS ​ ​ ​ ​ ​ ​6000
GRR ​ ​ ​ ​ ​ ​800
GRE ​ ​ ​ ​ ​ ​3257.5
NCI ​ ​ ​ ​ ​ ​552.5
Liab (1200+620) ​ ​ ​ ​1820
Question 4
Explain THREE (3) main components IFRS 3.
(9 marks)
END OF QUESTION PAPER