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FA 4 Chapter 2 - Q4

Adam and Kamal declared a dividend for the year ended 31.12.07 as below : 8% preference share 10% preference share ordinary share 9. Good will is amortized over 4 years.

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Vasant Sriudom
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125 views5 pages

FA 4 Chapter 2 - Q4

Adam and Kamal declared a dividend for the year ended 31.12.07 as below : 8% preference share 10% preference share ordinary share 9. Good will is amortized over 4 years.

Uploaded by

Vasant Sriudom
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© Attribution Non-Commercial (BY-NC)
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Question 4 Following the balance sheet for Adam and Kamal.

Balance Sheet as at 31.12.07 Land and building (book value) Plant and machinery (book value) Fitting and fixtures Investment in Kamal : 120,000 ordinary share 20,000 preference share 10% debenture Investment Inventories Debtor Current account - Kamal Bill receivable Cash Rent receivable Adam 544,800 306,300 187,000 288,000 30,000 20,000 200,000 35,600 25,000 55,000 45,000 30,000 42,000 30,000 35,000 55,000 20,000 1,573,700 960,000 960,000 120,000 240,000 150,000 100,000 50,000 70,000 231,000 34,000 15,000 25,000 20,000 30,000 40,000 6,300 10,000 1,573,700 960,000 70,000 80,000 50,000 80,000 120,000 32,400 Kamal 330,000 150,000 105,000

ordinary share at RM1.20 each 8% preference share at RM1.50 each 10% preference share at RM 1.50 each 9% debenture 10%debenture Share premium General reserve Profit and loss Creditor Current account - Adam Bill payable Bank debenture interest

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja

Additional Information: 1. Adam acquired 120,000 of ordinary share in Kamal on 1.1.06.The account balances were sown as below : RM Ordinary share RM1.20 each 240,000 10% preference share RM1.50 each 150,000 Share premium 50,000 General reserve 40,000 *Profit and loss 35,000 (* net after the settlement of dividend RM20,000) 2. On 15.01.06 a dividend of RM20,000 had been paid by Kamal and Kamal had treated as a revenue in its account. 3. On the date of acquisition, land and building of Kamal had been revalued and had been increased of RM45,000.The group agreed to depreciate at 12% per annum.The transaction had not been recorded yet. 4. All the inventories in Kamal was purchased from Adam,which were invoiced at cost plus 25%. 5. The differences in the current account was caused by good in transit from Adam. 6. RM10,000 of bills payable Kamal was amount owed to Adam.RM4,000 had been discounted by Adam. 7. Adam had not be recorded the debenture interest receive from Kamal. 8. Adam and Kamal declared a dividend for the year ended 31.12.07 as below : 8% preference share 10% preference share Ordinary share 9. Good will is amortized over 4 years. 1 Year 1 Year 7%

Prepare : a. b. c. d. Cost of control account Consolidated profit and loss account Minority interest account Consolidated balance sheet as at 31.12.07

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja

Answer :

Cost of control Account RM Investment : Ordinary share Ordinary share 288,000 Preference share Preference share 30,000 General reserve Debenture 20,000 debenture Dividend Share premium Profit and loss Goodwill Revaluate - Land 338,000

RM 144,000 30,000 24,000 20,000 12,000 30,000 21,000 30,000 27,000 338,000

Profit and loss subsidiary RM Cost of control Minority interest Depreciation Dividend : p/s o/s Profit and loss -C 21,000 75,360 10,800 15,000 16,800 92,040 Balance forward

RM 231,000

231,000

231,000

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja

Consolidated Profit and loss Dividend Unrealised profit Dividend : p/s O/s Goodwill Consolidate balance sheet RM 12,000 5,000 9,600 67,200 15,000 118,320 227,120 227,120 debenture interest div payable : p/s o/s Profit and loss-S -H RM 2,000 3,000 10,080 92,040 120,000

Minority interest account RM Consolidate balance sheet 353,360 Ordinary share share premium general reserve profit and loss preference share revaluate-land

RM 96,000 20,000 28,000 75,360 120,000 18,000 353,360

353,360

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja

Balance Sheet as 31.12.07 Land and building Plant and machinery Fitting and fixtures Investment Inventories Debtor Bill receivable Cash Rent receivable Good in transit Goodwill RM 900,900 456,300 292,000 200,000 55,600 100,000 66,000 90,000 20,000 15,000 15,000 2,210,800 960,000 120,000 77,820 70,000 160,000 50,000 98,000 118,320 66,400 357,360 39,000
70,000

ordinary share 8% preference share 10% preference share 9% debenture 10%debenture Share premium General reserve Profit and loss Creditor minority interest Bill payable Bank debenture interest dividend

14,300
9,600 2,210,800

Hak Milik Sant Sahabat dan Kawan-Kawan. Dibenar untuk tujuan pembelajaran sahaja

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