2. The following are the summarised statements of the financial position of Daffodils Berhad and Camellia Berhad as at 30 June 20X9:

                                                                   Daffodils                   Camellia

                                                                       RM                            RM

Assets                           

Non-current assets

Tangible                                                      360,000                     135,000 Investments                                                300,000                           - Current assets                                             315,000                      210,000

Total assets                                                  975,000                      345,000

 

Equities and Liabilities

Ordinary shares of RM1 each                     504,000                       150,000 Share premium                                            36,000                          15,000 Retained earnings                                      240,000                          75,000 Current liabilities                                        195,000                        105,000

Total equity and liabilities                           975,000                        345,000

Required:

Prepare a statement of the consolidated financial position of Daffodils Berhad and its subsidiary, Camellia Berhad at 30 June 20x9 under the assumption that Daffodils Berhad acquired 150,000 shares in Camellia Berhad for RM2 per share on 30 June 20X9. The investment account contains the cost of shares in Camellia Berhad and non-group investments. 

QUESTION TWO

On 1 October 2010, Pythias secured a majority equityshareholding in Sara on the following terms: an immediate paymentof K4 per share on 1 October 2010 and a further amount deferreduntil 1 October 2011 of K5.4 million. The immediate payment hasbeen recorded in Pythias’s financial statements, but the deferredpayment has not been recorded. Pythias’s cost of capital is 8% perannum. On 1 February 2011, Pythias also acquired 25% of the equityshares of Austin paying K10 million in cash.

The summarised statements of financial position of the threecompanies at 30 September 2011 are:

Pythias Sara Austin

Assets K000 K000 K000

Non-current assets

Property, plant and equipment 40,000 31,000 30,000

Intangible assets 7,500

Investments – Sara (8 million shares at K4 each) 32,000

– Austin 10,000 nil nil

–––––– –––––– ––––––

89,500 31,000 30,000

Current assets

Inventory 11,200 8,400 10,000

Trade receivables 7,400 5,3005,000

Bank 3,400 nil 2,000

–––––– –––––– ––––––

Total assets 111,500 44,700 47,000

–––––– –––––– ––––––

Equity and liabilities

Equity Equity shares of K1 each 50,000 10,000 10,000

Retained earnings – at 1 October 2010 25,700 12,00031,800

– for year ended 30 September 2011 9,200 6,000 1,200

–––––– –––––– ––––––

84,900 28,000 43,000

Non-current liabilities

Deferred tax 15,000 8,000 1,000

Current liabilities

Bank nil 2,500 nil

Trade payables 11,600 6,200 3,000

–––––– –––––– ––––––

Total equity and liabilities 111,500 44,70047,000

–––––– –––––– ––––––

The following information is relevant:

(i) Pythias’s policy is to value the non-controlling interest atfair value at the date of acquisition. For this purpose thedirectors of Pythias considered a share price for Sara of K3.50 pershare to be appropriate.

(ii) At the date of acquisition, the fair values of Sara’sproperty, plant and equipment was equal to its carrying amount withthe exception of Sara’s plant which had a fair value of K4 millionabove its carrying amount. At that date the plant had a remaininglife of four years. Sara uses straight-line depreciation for plantassuming a nil residual value. Also at the date of acquisition,Pythias valued Sara’s customer relationships as a customer baseintangible asset at fair value of K3 million. Sara has notaccounted for this asset. Trading relationships with Sara’scustomers last on average for six years.

(iii) At 30 September 2011, Sara’s inventory included goodsbought from Pythias (at cost to Sara) of K2.6 million. Pythias hadmarked up these goods by 30% on cost. Pythias’s agreed currentaccount balance owed by Sara at 30 September 2011 was K1.3million.

(iv)Impairment tests were carried out on 30 September 2011 whichconcluded that consolidated goodwill was not impaired, but, due todisappointing earnings, the value of the investment in Austin wasimpaired by K2.5 million.

(v) Assume all profits accrue evenly through the year.

Required:

Prepare the consolidated statement of financial position forPythias as at 30 September 2011. (25 marks)

Question 3 (50 marks)
The following information is available for Heritage Limited:
1. The reporting period of Heritage Ltd ends on 30 June of every year.
The following balances are available as at 30 June 20x8
Land and building at cost 400 000
Accumulated depreciation on buildings at 01/07/20x7 12 000
Furniture at cost 80 000
Accumulated depreciation as at 01/07/20x7 10 000
Vehicles at cost 300 000
Accumulated depreciation as at 01/07/20x7 60 000
Investments as at 01/07/20x7 34 000
Bank 96 700
Trade and other receivables 20 000
Ordinary share capital 275 000
Preference share capital 280 000
Retained earnings as at 01/07/20x7 7 000
Replacement reserves 58 250
10% Bank loan 100 000
Payables 33 500
Additional information:
1. The buildings are occupied for the purposes of the activities of the entity and are accounted for in terms of the cost model. At the date of acquisition, 01 July 20x6, the land was valued at N$ 100 000 and buildings at N$ 300 000. Depreciation is written off on buildings at 4% per annum on the straight line method.
2. Furniture and vehicles were purchased on 01 July 20x6 at N$ 80 000 and N$ 300 000 respectively. Depreciation is written off on furniture at 12,5% per year on cost and on
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vehicles at 20% per year on the diminishing balance method. The necessary write-offs for the current year still need to be done.
3. The value of the investments is valued at N$ 42 000 as at 30 June 20x8
4. Inventories consist as at 01 June 20x8 amounted to N$ 22 000. Inventories are measured at lower of cost (FIFO) and net realisable value.
5. Authorised share capital for Heritage Ltd is 400 000 ordinary shares at N$ 1,10 each and 200 000 8% preference shares at N$ 1,75 each. The company had already issued 250 000 ordinary shares at N$ 275 000 and 160 000 preference shares at N$ 280 000. The company had issued 25 000 shares at N$ 2,00 during the year. Preference share capital form part of equity.
6. The loan was entered into on 01 July 20x6 at an interest rate of 10% per annum. The loan is secured by a mortgage bond on land and buildings and is repayable in annual instalments of N$ 20 000 from 31 December 20x8.
7. Payables consist of the following:
Trade payables 6 000
Namibian company tax 3 000
Dividend payable 24 500
8. Profit for the year amounted to N$ 60 000.
9. On 30 March 20x8 a new vehicle with a cost price of N$ 55 000 was purchased for use in the delivery of goods to customers.
10. At 30 June 20x8, inventory worth N$ 4 000 were stolen.
Required:
1.1 Prepare the statement of financial position as at 30 June 20x8 to comply with the requirements of IFRS and Companies Act,
1.2 Prepare the following notes to accompany the financial statements and to comply with IFRS and Companies Act:
? Basis of presentation
? Statement of significant accounting policies
? Property, plant and equipment
? Financial assets
? Inventories
? Share capital and
? Non-current liabilities as at 30 june20x8; and
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1.3 The statement of changes in equity for the year ended 30 June 20x8 for Heritage Ltd to comply with the minimum requirements of the Companies Act of 2008 and International Financial Reporting Standards (IFRS). Comparative figures are required were necessary

Question 3 (50 marks)
The following information is available for Heritage Limited:
1. The reporting period of Heritage Ltd ends on 30 June of every year.
The following balances are available as at 30 June 20x8
Land and building at cost 400 000
Accumulated depreciation on buildings at 01/07/20x7 12 000
Furniture at cost 80 000
Accumulated depreciation as at 01/07/20x7 10 000
Vehicles at cost 300 000
Accumulated depreciation as at 01/07/20x7 60 000
Investments as at 01/07/20x7 34 000
Bank 96 700
Trade and other receivables 20 000
Ordinary share capital 275 000
Preference share capital 280 000
Retained earnings as at 01/07/20x7 7 000
Replacement reserves 58 250
10% Bank loan 100 000
Payables 33 500

Additional information:
1. The buildings are occupied for the purposes of the activities of the entity and are accounted for in terms of the cost model. At the date of acquisition, 01 July 20x6, the land was valued at N$ 100 000 and buildings at N$ 300 000. Depreciation is written off on buildings at 4% per annum on the straight line method. 2. Furniture and vehicles were purchased on 01 July 20x6 at N$ 80 000 and N$ 300 000 respectively. Depreciation is written off on furniture at 12,5% per year on cost and on

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vehicles at 20% per year on the diminishing balance method. The necessary write-offs for the current year still need to be done. 3. The value of the investments is valued at N$ 42 000 as at 30 June 20x8 4. Inventories consist as at 01 June 20x8 amounted to N$ 22 000. Inventories are measured at lower of cost (FIFO) and net realisable value. 5. Authorised share capital for Heritage Ltd is 400 000 ordinary shares at N$ 1,10 each and 200 000 8% preference shares at N$ 1,75 each. The company had already issued 250 000 ordinary shares at N$ 275 000 and 160 000 preference shares at N$ 280 000. The company had issued 25 000 shares at N$ 2,00 during the year. Preference share capital form part of equity. 6. The loan was entered into on 01 July 20x6 at an interest rate of 10% per annum. The loan is secured by a mortgage bond on land and buildings and is repayable in annual instalments of N$ 20 000 from 31 December 20x8. 7. Payables consist of the following:
Trade payables 6 000
Namibian company tax 3 000
Dividend payable 24 500
8. Profit for the year amounted to N$ 60 000. 9. On 30 March 20x8 a new vehicle with a cost price of N$ 55 000 was purchased for use in the delivery of goods to customers. 10. At 30 June 20x8, inventory worth N$ 4 000 were stolen.

Required:
1.1 Prepare the statement of financial position as at 30 June 20x8 to comply with the requirements of IFRS and Companies Act,
1.2 Prepare the following notes to accompany the financial statements and to comply with IFRS and Companies Act:
? Basis of presentation ? Statement of significant accounting policies ? Property, plant and equipment ? Financial assets ? Inventories ? Share capital and ? Non-current liabilities as at 30 june20x8; and

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1.3 The statement of changes in equity for the year ended 30 June 20x8 for Heritage Ltd to comply with the minimum requirements of the Companies Act of 2008 and International Financial Reporting Standards (IFRS). Comparative figures are required were necessary.