Chapter 1- Basic Principles of Group Accounts

Question 1 Kuin Bhd has acquired 225,000 of ordinary shares, 65,000 preference shares and RM 30,000 8% Debentures of Suni Bhd on 31.12.2008. At the date of acquisition the balance of Profit and Loss and Share Premium accounts of Suni were RM 28,000 and RM 48,000. Goodwill arise will be amortised in Profit and Loss account.

Balance Sheet as at 31/12/2009 Kuin Bhd Fixed Assets Vehicles Machine Investment in Suni Bhd.: -Ordinary shares -Preference shares -8% Debentures Current Assets Stock Current Liabilities Creditors Issued Share Capital Preference Shares of RM1 each Ordinary Shares of RM1 each Profit and Loss Share Premium 8% Debenture 9% Debenture 85,000 91,000 250,000 70,000 30,000 441,000 60,000 Suni Bhd 120,000 440,000 560,000

(12,000)

73,000 514,000 300,000 35,000 50,000 129,000 514,000

(15,000)

45,000 605,000 100,000 300,000 45,000 60,000 100,000 605,000

You are required to prepare these accounts : i. ii. iii. iv. v. Cost of Control Consolidated Profit and Loss Consolidated Share Premium Minority Interest Consolidated Balance Sheet as at 31/12/2009

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Suggested Answer: Percentage ordinary share = 225,000/ 300,000 x 100 = 75%

B/f

Investment- Kuin Bhd 250,000 CCA 250,000 Profit & Loss-Kuin Bhd 35,000 B/f 35,000 Ordinary Share-Suni Bhd 225,000 B/f 225,000 Profit & Loss-Suni Bhd 21,000 B/f 45,000 11,250 12,750 Share Premium-Suni Bhd 36,000 B/f 60,000 15,000 9,000

MI

C P&L

Minority Interest 136,250 O/s P/s P&L S.P Consolidated P&L 74,750 P&L-H P&L-S Goodwill

75,000 35,000 11,250 15,000

CCA

CBS

35,000 12,750 27,000

CCA MI C P&L

CCA MI C-P

Cost of Control Account Inv-O/s 250,000 O/s P/s 70,000 P/s Debenture 30,000 P&L Goodwill 27,000 S.P Debenture

225,000 65,000 21,000 36,000 30,000

Consolidated Balance Sheet Fixed Asset 651,000 Current Asset 145,000 Creditor ( 27,000 ) 769,000 Ordinary Share 300,000 Profit & Loss 74,750 Share Premium 59,000 8% Debenture 70,000 9% Debenture 129,000 Minority Interest 136,250 769,000

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Question 2 Naz Bhd acquired 70% ordinary shares and 50% preference shares of Din Bhd on 01.07.2009. Following are the balance sheet for both holding and subsidiary. Balance Sheet as at 31/12/2010 Naz Bhd Fixed Assets Land and Building Plant and Machinery Investment in Din Bhd.: -Ordinary shares -Preference shares Current Assets Stock Debtors Bank 46,000 172,000 150,000 10,000 378,000 111,000 30,000 19,000 160,000 65,000 15,000 2,000 82,000 Din Bhd 97,000 108,000 205,000

Current Liabilities Creditors

(100,000 )

60,000 438,000

( 62,000 )

20,000 225,000

Issued Share Capital Preference Shares of RM0.50 each Ordinary Shares of RM1 each Profit and Loss Share Premium General Reserves

300,000 50,000 20,000 68,000 438,000

35,000 120,000 40,000 15,000 15,000 225,000

On the date of acquisition, the accounts balaces of G Bhd were as below: RM Share Premium General Reserves Profit and Loss 12,500 17,000 41,000

Goodwill arise is amortised in Profit and Loss account. You are required to prepare these accounts. i. ii. iii. iv. Cost of Control Account Consolidated P&L Minority Interest Consolidated Balance Sheet as at 31/12/2010

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Suggested Answer :

CCA MI C-P

Share Premium 8,750 B/f 4,500 1,750

15,000

G&R P&L-S CBS

CCA MI

General Reserves 11,900 B/f 5,100 C-R Mi Profit & Loss 28,700 B/f 12,300 C-P&L MI Cost of Control Account 150,000 O/s 10,000 P/s P&L G&R S.P Goodwill

15,000 1,400 600

C-P&L Goodwill CBS

Minority Interest 600 O/s 300 P/s 74,500 P&L S.P G&R Consolidated P&L 700 P&L-H 9,150 40,150

36,000 17,500 12,300 4,500 5,100 50,000

CCA MI

40,000 700 300

Inv-O/s P/s

84,000 17,500 28,700 11,900 8,750 9,150

Consolidated Balance Sheet Fixed Asset 423,000 Current Asset 242,000 Creditor ( 162,000 ) 503,000 Ordinary Share 300,000 Profit & Loss 40,150 Share Premium 21,750 General Reserves 66,600 Minority Interest 74,500 503,000

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Question 3 Given below are the balance sheet of He and Hu. HE 300 450 180 ( 70 ) 110 860 500 360 860 110 ( 30 ) HU 280

Fixed Assets Investment in Hu Ltd-150 shares Current Assets (-) Current Liabilities Issued Share Capital Ordinary Shares of RM2 each Profit and Loss

80 360 300 60 360

You are required to prepare these accounts: i. ii. iii. iv. Cost of Control Account Share Capital Consolidated Profit and Loss Consolidated Balance Sheet as at 31.12.2008

Suggested Answer: Ordinary Share= 300/ Rm2 = 150 Share ( 100% ) Investment- He Ltd 450 CCA Profit & Loss- He Ltd 360 B/f Share Capital- Hu Ltd 300 CCA Profit & Loss-Hu Ltd 60 CCA Cost of Control Account 450 O/s P&L Goodwill Consolidated Profit & Loss 360 P&L-He

B/f C P&L B/f B/f Investment

450 360 300 60 300 60 90 360

CBS

Consolidated Balance Sheet as at 31/12/2008 Fixed Asset 580 Current Asset 290 Current Liabilities ( 100 ) 860 Ordinary Shares 500 Profit & Loss 360 860

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