CHAPTER 2

Question 1 Syarikat Ainul Bhd acquired ordinary shares and 10% preference shares in Syarikat Mardiah Bhd at 1 January 2008. Balance sheet for both companies as at 31.12.2009 were as follows:
Ainul RM Non Current Assets: Land and Building Machinery Investment in Mardiah Bhd: -400,000 units Ordinary shares -50,000 units 10% Preference shares 440,000 50,000 270,000 210,000 340,000 170,000 Mardiah RM

Current Assets: Cash at Bank Inventories Debtors 120,000 160,000 160,000 90,000 70,000 100,000

(Minus) Current Liabilities: Creditors Proposed ordinary shares dividend Working Capital (90,000) (50,000) 300,000 1,270,000 Financed by: Ordinary shares @ RM1.00 each 10% Preference shares Profit and Loss Account 1,000,000 200,000 70,000 1,270,000 500,000 100,000 50,000 650,000 (80,000) (40,000) 140,000 650,000

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Additional information: a) Board of directors Ainul Bhd had declared 5% ordinary shares dividend and has been recorded. b) Ainul Bhd and Mardiah Bhd also declared 10% preference shares dividends for this year. Both companies has not recorded the transaction. c) Included in Mardiah Bhd closing inventories is the goods bought from Ainul Bhd amounted RM50,000 by credit. Ainul Bhd gained RM10,000 profits from the sales of the stock. The payment has not been made and the goods still remain as closing inventories. d) The balance of profit and loss account at acquisition date was a credit balance of RM35,000.

You are required to prepare: a) b) c) d) e) Cost of control account Minority interest account Profit and loss account of Mardiah Bhd Consolidated profit and loss account Consolidated balance sheet of Ainul Group Bhd as at 31 December 2009

CCA (Cost of Control Account) 80% Investment in Mardiah o/s p/s o/s 440,000 p/s 50,000 P&L godwill 490,000 400,000 50,000 28,000 12,000 490,000

CBS

Minority Interest 158,000 o/s p/s P&L

100,000 50,000 8,000

158,000

158,000

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Profit and Loss Account Mardiah Bhd CCA Proposed dividend: p/s Minority Interest CBS 10,000 8,000 4,000 50,000 50,000 28,000 Bal. b/d 50,000

CCA Proposed dividend: o/s p/s Inventories Minority Interest CBS

Consolidated P&L Ainul Mardiah 28,000 Bal. b/d

Ainul Mardiah 70,000 50,000

20,000

Dividend received: 10,000 o/s p/s 8,000 4,000 50,000

5,000 32,000

10,000 77,000 107,000

107,000

50,000

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Consolidated Balance Sheet as at 31 December 2009

RM Non Current Assets: Land and Building Machinery Goodwill 610,000 380,000 12,000

Current Assets: Cash at Bank Inventories Debtors 210,000 220,000 260,000 690,000

(Minus) Current Liabilities: Creditors Proposed ordinary shares dividend o/s p/s Working Capital (58,000) (25,000) 437,000 1,439,000 Financed by: Ordinary shares @ RM1.00 each 10% Preference shares Minority Interest Profit and Loss Account 1,000,000 200,000 158,000 81,000 1,439,000 (170,000)

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Question 2 Here is the Balance Sheet Syarikat Intan (Holding) and the Syarikat Suasa (Subsidiary) on December 31, 2007: Syarikat Intan RM Ekuiti dan liabiliti: Modal saham biasa @ RM1.00 Akaun untung rugi Aset: Pelaburan dalam subsidiari (350,000 unit saham biasa dalam Suasa) Inventori Lain-lain aset 900,000 400,000 1,300,000 420,000 80,000 800,000 1,300,000 Syarikat Suasa RM 500,000 300,000 800,000 100,000 700,000 800,000

Additional Information: a) Syarikat Intan to purchase interests in the Syarikat Suasa on 1 January 2006 in which the profit and loss account shows a credit balance of RM100, 000. b) In financial year 2007, the Company has submitted inventoryDiamond worth RM70, 000 to Suasa States. The actual cost of inventory is RM50, 000. c) The Syarikat Intan and Syarikat Suasa also declared a dividend of ordinary shares of 5% and 4% respectively. This itemhas not been recorded. Required: a) Cost Account Control. b) Minority Interest Account. c) Combined Balance Sheet at December 31, 2007.

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Investment : o/s goowill

CCA (Cost of Control Account) 70% o/s 420,000 140,000 P&L

350,000 210,000

560,000

560,000

CBS

Minority Interest 240,000 o/s P&L

150,000 90,000

240,000

240,000

Profit and Loss Account Suasa CCA Proposed dividend: o/s 4% Minority Interest CBS 320,000 320,000 20,000 90,000 210,000 Bal. b/d 300,000

CBS

20,000

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CCA Proposed dividend: p/s o/s Inventories Minority Interest CBS

Intan -

Consolidated P&L Suasa 210,000 Bal. b/d CBS

Intan Suasa 400,000 300,000 20,000

45,000

20,000

20,000 335,000 400,000 90,000 320,000

400,000

320,000

Consolidated Balance sheet as at 31 December 2007 Ekuiti dan liabiliti: CBS Minority Interest Modal saham biasa @ RM1.00 Akaun untung rugi Aset: Inventory Goodwill Lain-lain aset 335,000 240,000 900,000 20,000 1,560,000 200,000 (140,000) 1,500,000 1,560,000

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