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    Exercise On Csopl - Associates Ruby Jade Topaz PDF

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    Noor Shukirrah
    Ruby Bhd owns 80% of Jade Bhd and 40% of its debentures. It also owns 40% of Pearl Bhd. Jade Bhd owns 60% of Topaz Bhd. The consolidated statements of profit or loss and other comprehensive income and changes in equity for the year ended 30 June 2017 must be prepared to account for these joint arrangements and associates. Goodwill on the acquisition of Jade Bhd was impaired, and land revaluations occurred for Ruby Bhd and Jade Bhd during the year. Intercompany transactions between the related entities must be eliminated in consolidation.

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    Exercise On Csopl - Associates Ruby Jade Topaz PDF

    Uploaded by

    Noor Shukirrah
    145 views2 pages
    Ruby Bhd owns 80% of Jade Bhd and 40% of its debentures. It also owns 40% of Pearl Bhd. Jade Bhd owns 60% of Topaz Bhd. The consolidated statements of profit or loss and other comprehensive income and changes in equity for the year ended 30 June 2017 must be prepared to account for these joint arrangements and associates. Goodwill on the acquisition of Jade Bhd was impaired, and land revaluations occurred for Ruby Bhd and Jade Bhd during the year. Intercompany transactions between the related entities must be eliminated in consolidation.

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    EXERCISE ON CSOPL - ASSOCIATES RUBY JADE TOPAZ.pdf

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    Ruby Bhd owns 80% of Jade Bhd and 40% of its debentures. It also owns 40% of Pearl Bhd. Jade Bhd owns 60% of Topaz Bhd. The consolidated statements of profit or loss and other comprehensive income and changes in equity for the year ended 30 June 2017 must be prepared to account for these joint arrangements and associates. Goodwill on the acquisition of Jade Bhd was impaired, and land revaluations occurred for Ruby Bhd and Jade Bhd during the year. Intercompany transactions between the related entities must be eliminated in consolidation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    145 views2 pages

    Exercise On Csopl - Associates Ruby Jade Topaz PDF

    Uploaded by

    Noor Shukirrah
    Ruby Bhd owns 80% of Jade Bhd and 40% of its debentures. It also owns 40% of Pearl Bhd. Jade Bhd owns 60% of Topaz Bhd. The consolidated statements of profit or loss and other comprehensive income and changes in equity for the year ended 30 June 2017 must be prepared to account for these joint arrangements and associates. Goodwill on the acquisition of Jade Bhd was impaired, and land revaluations occurred for Ruby Bhd and Jade Bhd during the year. Intercompany transactions between the related entities must be eliminated in consolidation.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    EXERCISE ON CSOPL

    Accounting for Joint Arrangement and Associates

    Given below are the draft statements of profit or loss and other comprehensive income and statement
    of changes in equity (extracted) for the year ended 30 June 2017 of Ruby Bhd and its related
    companies.

    Statement of profit or loss and other comprehensive income for the year ended 30 June 2017

    Ruby Jade Topaz Pearl


    Bhd Bhd Bhd Bhd
    RM’ 000 RM’000 RM’000 RM’000
    Revenue 24,000 20,000 5,000 3,200
    Cost of sales (10,000) (8,000) (2,400) (2,320)
    14,000 12,000 2,600 880
    Expenses (4,000) (4,000) (800) (400)
    10,000 8,000 1,800 480
    Debenture interest expense - (2,000) - -
    Debenture interest income 800
    Dividends from Jade 480 - - -
    Profit before taxation 11,280 6,000 1,800 480
    Taxation (3,166) (2,080) (400) (160)
    Profit after taxation 8,114 3,920 1,400 320

    Other comprehensive income


    Surplus on revaluation 160 80 - -
    Total comprehensive income 8,274 4,000 1,400 320

    Statement of changes in equity for the year ended 30 June 2017 (extract)

    Ruby Jade Topaz Pearl


    Bhd Bhd Bhd Bhd
    RM’ 000 RM’000 RM’000 RM’000
    Retained profit as at 1 July 2016 5,120 1,480 600 400
    Profit for the year 8,114 3,920 1,400 320
    Dividend paid at 30 June 2017:
    Ordinary dividend (2,000) (600) - (400)
    Preference dividend (200)
    Retained profit as at 30 June 2017 11,234 4,600 2,000 320

    Additional information:

    1. Ruby Bhd acquired 80% of the ordinary shares and 40% of the 10% Debentures of
    Jade Bhd on 1 July 2015 for RM87 million. As at that date, Jade Bhd had the following balances:

    RM’000
    Ordinary share capital 20,000
    Preference share capital 4,000
    10% Debentures 20,000
    Retained profits 800

    On 1 July 2015, the fair value of a freehold land of Jade Bhd was RM2,000,000 more than its
    carrying amount. During the current financial year, the fair value increase by another RM80,000.
    The fair value of a freehold land of Ruby Bhd also increase by RM160,000 in the current
    financial year.

    The revaluation model was adopted for the freehold land.

    Goodwill on acquisition of Jade Bhd was RM1,000,000. As at 30 June 2016, the goodwill was
    impaired by RM640,000. There was a further impairment loss of RM200,000 as at 30 June 2017.

    During the year ending 30 June 2017, Jade Bhd sold goods valued at RM3,000,000 to Ruby Bhd.
    The goods were sold at cost plus 25%. Only 50% of the goods has been sold by Ruby Bhd.

    2. Jade Bhd acquired 600,000 ordinary shares of Topaz Bhd on 1 July 2015 for a cash consideration
    of RM720,000 when the retained profit of Topaz Bhd was RM200,000. The issued ordinary share
    capital of Topaz Bhd was 1,000,000 shares of RM1 each. The bargain purchase arising at the
    date of acquisition was RM100,000.

    3. On 1 October 2016, Ruby Bhd also acquired 400,000 of the 1,000,000 ordinary shares of RM1
    each of Pearl Bhd. Ruby Bhd has a significant influence over Pearl Bhd. The bargain purchase
    at the date of acquisition was RM12,000.

    After the date of acquisition, Ruby Bhd sold goods costing RM100,000 for RM120,000 to Pearl
    Bhd. All the goods were unsold by Pearl Bhd as at 30 June 2017.

    4. All profits and losses are deemed to accrue evenly throughout the year.

    5. The group’s policy is to measure non-controlling interest at proportionate of the net assets of the
    subsidiary.

    Required:

    a. Prepare the consolidated statement of profit or loss and other comprehensive income for the year
    ended 30 June 2017.

    b. Prepare the consolidated statement of changes in equity (extract) for the year ended 30 June
    2017, showing the group retained profit and non-controlling interest.

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