EXERCISE ON CSOFP

Fellow Subsidiaries

The summarised Statements of Financial Position of Pandan Bhd, Serai Bhd and Cumin Bhd as
at 30 June 2018 are as follows:

Pandan Bhd Serai Bhd Cumin Bhd

RM’000 RM’000 RM’000
Assets
Property, plant and equipment 2,600 937 1,250
Intangibles 875 300
Investment in Serai Bhd:
1,500,000 ordinary shares 1,875
20,000 preference shares 20
Investment in Cumin Bhd 1,500
Inventories 750 650 305
Bills receivable 175 675 37
Trade receivables 281 383 210
Ordinary dividend receivable 75
Bank 187 206 88
8,338 3,151 1,890

Equity and Liabilities

Ordinary shares of RM1.00 each 5,650 2,000 1,250
Non-redeemable preference shares of
RM1.00 each 750 200
General reserve 270 170
Retained profit as at 1 July 2017 532 350 150
Profit for the year 217 175 125
Long term loan 250
Bills payable 269 46 90
Trade payables 468 110 25
Ordinary dividend payable 182 100
8,338 3,151 1,890

Additional information:

1. Pandan Bhd bought the ordinary shares and preference shares in Serai Bhd on 1 January
2015. On the date of acquisition, the general reserve and retained profit of Serai Bhd were
RM25,000 and RM237,000 respectively.

2. On 1 July 2016, Pandan Bhd acquired 60% of the issued ordinary shares of Cumin Bhd
when the retained profit of Cumin Bhd was RM125,000. The fair values of the net assets
of Cumin Bhd on 1 July 2016 were equal to their carrying values except for a building
whose fair value was RM100,000 more than its carrying value. No adjustment was made
in the books of Cumin Bhd to reflect this value. The remaining life of the building was 40
years.

3. As at year end, Cumin Bhd paid ordinary dividend of RM50,000.

4. On 30 January 2018, Pandan Bhd sold a piece of land to Serai Bhd at a profit of
RM35,000.

5. RM100,000 of the long term loan of Cumin Bhd was obtained from Pandan Bhd. Pandan
Bhd had included this amount as part of its bills receivable.

6. During the year ended 30 June 2018, Serai Bhd sold goods to Pandan Bhd at a profit of
RM6,000. By the year end, all these goods had been sold by Pandan Bhd to third parties.
On 30 June 2018, Pandan Bhd remitted RM8,000 cash for the final settlement of the
amount owing to Serai Bhd but the cash was not received by Serai Bhd until early July
2018.

7. In February 2018, Cumin Bhd sold goods to Pandan Bhd at an invoiced price of RM12,500.
RM2,000 of these sales had yet to be paid by Pandan Bhd. Cumin Bhd made a profit of
20% on invoice price. By the financial year end, 40% of these goods had been sold by
Pandan Bhd to third parties.

8. As at 30 June 2018, goodwill on consolidation of Serai Bhd was impaired by 8%.

9. It is the policy of the group to depreciate all assets using straight line method on a yearly
basis.

10. It is the group’s policy to measure the non-controlling interest at its proportionate share of
the fair value of the identifiable nets assets of the subsidiary on the acquisition date.

Required:

a. Determine the following using the schedule format:

i. Goodwill or bargain purchase on consolidation for Serai Bhd;

ii. Goodwill or bargain purchase on consolidation for Cumin Bhd;
iii. Group’s retained profit for the year ended 30 June 2018; and
iv. Non-controlling interest as at 30 June 2018.

b. Prepare the Consolidated Statement of Financial Position of Pandan Bhd Group as at 30

June 2018 (Show all workings).