FA2 Sept 2017 (adapted)

A.Q1
Workings:

1 Cost of sales RM
Item (1)
Opening inventory 6,798,000 233,000-6,000+5,000
Add: Purchases 8,063,000
Less: Closing Inventory (232,000)
COS 14,629,000

2 Depreciation
Building (5% x 175mil) 8,750,000
P&E (20% x (20,468K- 7,144K) 2,664,800
MV (25% x 55,237K) 13,809,250
Total depn exp 25,224,050
Divided into:
80% Admin exp 20,179,240
20% Dist costs 5,044,810
Fair value (27m) > Carrying Amount (24m)
27m - 24m = 3m
3 Land revaluation
Gain on revaluation 3,000,000 OCI/RR

4 Provision for doubtful debts

2% x RM62.2 mil 1,244,000 Admin exp.

5 R&D expenses
Expense to SOPL 1,600,000 Admin exp.
Still under development at year
Capitalised as IA to SOFP 2,500,000 end so no amortization.

Amortization (20% x 35 mil) 7,000,000 Admin exp.

6 Contingent Asset - Probable Disclose. No adjusting entries.

7 Dr Retained Earnings Cr Bank

For 2016 final dividends 4,900,000
For 2017 interim dividends 2,500,000

Proposed dividends No entries

8 Prepaid S&D exp.

Deduct from Dist. Cost 565,000

Administrative Expenses RM
Trial balance 18,642,000
Depreciation 20,179,240
Provision for doubtful debts 1,244,000
R&D exp. 1,600,000
Amortisation 7,000,000
48,665,240
 Distribution Costs RM
Trial balance 4,563,000
Depreciation 5,044,810
Prepaid S&D exp. -565,000
9,042,810

Finance Cost RM
Debenture interest (8% x 5mil) 400,000

(a) SOPL & OCI ftye 31/3/2017

RM
Sales 105,200,000
Cost of sales (14,629,000)
Gross profit 90,571,000
Administrative expenses (48,665,240)
Distribution costs (9,042,810)
Finance cost (400,000)
Profit before (after) tax 32,462,950 Transfer to SOCE
Other Comprehensive Income
Gain on revaluation 3,000,000 Transfer to SOCE
Total Comprehensive Income 35,462,950

(b) SOCE ftye 31/3/2017

Revaluation Retained
Ord. shares Reserves Earnings Total
RM RM RM RM
Bal b/d (Trial balance) 155,000,000 26,755,000 181,755,000
Total CI 3,000,000 32,462,950 35,462,950
Dividend - final 2016 (4,900,000) (4,900,000)
Dividend - interim 2017 (2,500,000) (2,500,000)
Bal c/d (transfer to SOFP) 155,000,000 3,000,000 51,817,950 209,817,950

c) Arik Berhad Acc. Depn at 1 Apr 2016 Add:

SOFP as at 31/3/2017 Depn exp in SOPL
= Acc. Depn at 31 Mar 2017
Cost Acc. Depn Carrying Amt
RM RM RM
Non-current assets Acc. Amortisation at 1 Apr 2016
Land (3) 27,000,000 Nil 27,000,000 Add: Amortisation exp in SOPL
Building 175,000,000 12,650,000 162,350,000
P&E 20,468,000 9,808,800 10,659,200
MV 55,237,000 16,259,250 38,977,750
Development cost (5) 37,500,000 14,000,000 23,500,000
262,486,950
Current assets Item (5) 2.5m + 35m (TB)
Inventory (1) 232,000
Trade receivables (4) 60,956,000
Prepaid S&D exp. 565,000
61,753,000
Total assets 324,239,950

Financed by:
Equity
Ordinary shares 155,000,000
Revaluation reserves 3,000,000
Retained earnings 51,817,950
209,817,950
Non-current liabilities
8% Debentures 5,000,000

Current liabilities
Trade payables 51,800,000
Interest payable (400K - 34K) 366,000
Bank (see workings below) 57,256,000
109,422,000
Total equity and liabilities 324,239,950

Workings for Bank A/C RM'000

Bal b/d (Cr - overdraft) -45,756
R&D exp (5) -1,600
Dev. Cost (5) -2,500
Dividend - Final 2016 -4,900
Dividend - Interim 2017 -2,500
Bal c/d (Cr - overdraft) -57,256
B.Q1 Assets less Liabilities bought over
from the partnership business.

Workings for Goodwill: RM RM

Purchase consideration 440,000
Less: Net assets taken over Revalued amount for the
sale of the partnership.
Premises 280,000
Fixtures & fittings 14,800
Inventories 10,000 TR less RM1,200 written off.
Trade receivables 16,600
Trade payables -52,600 -268,800
Goodwill 171,200

Basically, add the amount from Perfect Bhd and the amount of
non-current assets bought over from the partnership.
Perfect Berhad
St. of Financial Position as at 1 July 2017
RM RM
Non-current assets
Goodwill 171,200 Revalued amount of the partnership's premis
Revalued amount of Perfect Bhd premises
Premises 1,280,000 = 280,000+1,000,000
Equipment 185,200
Motor vehicles 65,400
Fixtures & fittings 14,800
1,716,600
Current assets
Inventories 93,800
Trade receivables 84,600
178,400
Total assets 1,895,000
Perfect Bhd's original SOFP amount, RM9
Purchase Consideration of RM250,000* b
Financed by: shares to the partners.
Equity * 440,000 - 70,000 - 120,000 = 250,000
Contributed capital 1,208,000
Revaluation reserves 184,900 Revalued amount less
Retained earnings 224,000 original SOFP amount
1,616,900
Non-current liabilities
Purchase consideration to the part
8% Debentures 120,000

Current liabilities Combine TP of the company and

the partnership taken over.
Trade payables 96,662
Bank 61,438
The company's bank balance less
158,100 RM70,000 cash paid as purchase
consideration to the partners.
 The company's bank balance less
RM70,000 cash paid as purchase
Total equity and liabilities 1,895,000 consideration to the partners.
d amount for the
he partnership.

RM1,200 written off.

d and the amount of

artnership.

d amount of the partnership's premises +

d amount of Perfect Bhd premises
00+1,000,000

ct Bhd's original SOFP amount, RM958,000 +

hase Consideration of RM250,000* by ordinary
es to the partners.
0,000 - 70,000 - 120,000 = 250,000

alued amount less

nal SOFP amount

Purchase consideration to the partners.

TP of the company and

ership taken over.

he company's bank balance less

M70,000 cash paid as purchase
onsideration to the partners.
he company's bank balance less
M70,000 cash paid as purchase
onsideration to the partners.
B.Q2

Mantak Bhd
SOCF ftye 31/3/2017
RM'000 RM'000
Cash Flows from Operating Activities
Net profit before tax 304
Adjustment for:
Depreciation 73
Gain on sale of PPE -30
Investment income -4
Interest expense 3
Operating profit before working capital changes 346
Increase in inventory -10
Decrease in TR 22
Decrease in TP -50
Cash generated from operations 308
Interest paid -3
Tax paid -35
Net cash inflow from operating activities 270

Cash Flows from Investing Activities

Investment income 4
Purchase of investment -195
Purchase of PPE -350
Sale of PPE 72
Net cash outflow from investing activities -469

Cash Flows from Financing Activities

Issuance of shares 270
Redemption of debentures -20
Dividends paid -13
Net cash inflow from financing activities 237
Net increase in cash and cash equivalents 38
Cash and cash equivalents at the end of the year 16
Cash and cash equivalents at the beginning of the year 54
 Workings:
Net profit before tax (work backwards from RE c/d)
RM'000
NPBT 304 OA
- Tax (4) -65
NPAT 239
RE b/d (SOFP) 380
619
- Dividends (3) -13
RE c/d (SOFP) 606

PPE (cost)
RM'000 RM'000
Bal b/d 335 Disposal (1a) 75
RR 35 Bal c/d 645
Bank * 350
720 720
To IA. Purchase PPE

Acc. Depn - PPE

RM'000 RM'000
Disposal (1b) 33 Bal b/d 55
Bal c/d 95 SOPL- Depn* 73 OA
128 128

Disposal -PPE
RM'000 RM'000
PPE (1a) 75 Acc Depn (1b) 33
OA Gain on sale* 30 Bank (1c) ** 72 IA

105 105

Interest Expense (for 6% Debentures) RM

Full year : 40,000 x 6% 2,400
Apr- Sep 2016 20,000 x 6% x 6/12 600
3,000 OA

Tax Paid
Tax Paid = Tax expense - (Increase inTax Payable)
= 65,000 - (65,000 -35,000)
= 35,000 (OA)