ABFA 3134 Financial Accounting Framework
Past Year Answers
Exam Date: 7 Sep 2019
Question 1
Parent's controlling percentage Non-controlling percentage
810,000/900,000 x 100% = 90% = 100% - 90% = 10%
Goodwill on consolidation
RM'000 RM'000
Investment in subsidiary 960
Non-controlling interest (10% x 965) 97 rounded
1,057
Less: Net assets acquired
Ordinary shares 900
General reserves 20
Retained earnings 45 (965)
Goodwill on acquisition 92
Less: Impairment loss (10% x 92) (9) rounded
83
Consolidated Retained Earnings on consolidation
RM'000 RM'000
Parent's balance 320
Less: URP on unsold inventory (1/2 x 20 x 25/125) (2)
318
Add: Share on post-acquisition
Subsi's balance 70
Less: Pre-acquisition (45)
Post-acquisition 25
90% holding 23 rounded
341
Less: Impairment loss (9)
332
Consolidated General Reserves on consolidation
RM'000 RM'000
Parent's balance 136
Add: Share on post-acquisition
Subsi's balance 40
Less: Pre-acquisition (20)
Post-acquisition 20
90% holding 18
154
Non-controlling interest on consolidation
RM'000 RM'000
Subsidiary's equity
Ordinary shares 900
General reserves 40
Retained earnings 70
1,010
10% holding 101
Cegah Bhd Group
Consolidated Statement of Financial Position as at 30 June 2019
RM'000
Non-current assets
Property, plant and equipment (1,083 + 870) 1,953
Goodwill 83
2,036
Current assets
Inventories (113 + 82 - URP 2) 193
Amount owing by subsidiary (30 - 30) -
Trade receivables (50 + 47) 97
Bank (104+78+ CIT 20) 202
492
Total Assets 2,528
Equity
Ordinary shares 1,800
Retained earnings 332
General reserves 154
2,286
Non-controlling interest 101
2,387
Current liabilities
Trade payables (54+42) 96
Amount owing to holding (10 - 10) -
Other payables and accuals (30 + 15) 45
141
Total equity and liabilities 2,528
-
Question 2 (A)
URP on unsold inventory = 1/2 x RM120,000 x 25/100 = RM15,000
Profit attributable to NCI = 20% x (RM292,000 - RM15,000) = RM55,400
Zera Bhd Group
Consolidated statement of profit or loss for the year ended 31 August 2019
RM'000
Revenue (1,800+500- interco sales120) 2,180
Cost of sales (445+62- interco purchases 120 + URP 15) (402)
Gross profit 1,778
Other income (40+8) 48
Dividends fromYew (35 - 35) -
Administrative expenses (120+80) (200)
Distribution costs (60+40) (100)
Finance costs (50+10) (60)
Profit before tax 1,466
Tax expense (42+24) (66)
Profit for the year 1,400
Profit for the year attributable to:
Owners of the parent (1,400 -55) 1,345
Non-controlling interest 55 rounded
1,400
Question 2 (B)
Asset is a present economic resources controlled by the entity as a result of past events.
Liability is a present obligation of the entity to transfer an economic resources as a result of
past events
Equity the residual interest in the assets of the entity after deducting all its liabilities.
Income is increase in assets, or decreases in liabilities, that results in increases in equity, other
than those relating to contribution from holders of equity claims
Expenses is decrease in assets, or increases in liabilities, that results in decreases in equity, other
than those relating to distribution to holders of equity claims
Question 3(A)
(a)
Property, plant and equipment are tangible items:
- held for use in the production or supply of goods and services, for rental to others, or for
administrative purposes; and
- are expected to be used for more than one accounting period
(b)
Cost of land RM'000
Purchase price 1,500
Demolition of old building 100
General overheads (4% x 100) 4
Legal fees for title search and purchase contract 36
1,640
Cost of building
Architect and plan approval fees 650
Direct materials and labour 800
Contractors' costs 150
Interest on borrowings to finance construction 50
1,650
Question 3(B)
(a)
- Abnormal amounts of wasted materials, labour or other production costs
- Storage costs; unless it is during the production process
- Administrative overheads that do not contribute in bringing inventories to their present
location and condition
- Selling costs
(b) Product X Product Y
RM RM
Cost per unit:
Direct materials 60 80
Direct labour 30 20
Production overheads 8 6
98 106
Net reliasable value per unit:
Selling price 150 60
Advertising (10) (12)
Commission (6) (4)
134 44
Value per unit 98 44
Total value of inventories as at 31 July 2019
= (RM98 x 4,000 units) + (RM44 x 5,500 units)
= RM634,000
Question 4 (A)
(a)
This is an adjusting event as it provide evidence of condition existed at the end of the reporting
period. RM8,000 is to be recognised as expenses and deducted from the carrying amount of
inventories in the reporting financial statements.
(b)
This is a non-adjusting event as it indicative of condition arose after the reporting period. The
nature and the estimated financial effects of the event should be disclosed in the reporting
financial statements.
(c)
This is a non-adjusting event as it indicative of condition arose after the reporting period. The
nature and the estimated financial effects of the event should be disclosed in the reporting
financial statements.
(d)
This is a non-adjusting event as it indicative of condition arose after the reporting period. The
nature and the estimated financial effects of the event should be disclosed in the reporting
financial statements.
(e)
This is an adjusting event as it provide evidence of condition existed at the end of the reporting
period. Four months bonus is to be recognised as expenses and increased to the accruals in the
reporting financial statements.
Question 4 (B)
(a)
A provision shall be recognised when:
- an entity has a present obligation (legal or constructive) as a result of a past event;
- it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation; and
- a reliable estimate can be made of the amount of the obligation.
(b)
A contingent liability is:
- a possible obligation that arises from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the entity; or
- a present obligation that arises from past events but is not recognised because:
(i) it is not probable that an outflow of resources embodying economic benefits will be required
to settle the obligation; or
(ii) the amount of the obligation cannot be measured with sufficient reliability.
Question 5
(a) Cost of Admin Distb
sales exp cost
RM'000 RM'000 RM'000
Purchases 4,450
Inventories @ 1 Aug 2018 800
Wages and salaries 480
General administrative 200
Directors remuneration 250
Closing inventories (1,000)
Depreciation of plant & building (5% x 5500) 275
Depreciation of delivery van (10% x (400 - 80)) 32
Depreciation of office eqp (10% x 900) 90
Bad debts 30
Doubtful debts (5% x (350 - 30)) - 40 (24)
Research 200
Amortisation of development (1000-200)/5 160
4,250 1,655 38
* 2/3 of cost = 2/3 x 1200 = 800 Vs NRV of 600. There will be a loss of 200 = 800 - 600.
Closing inventories = 1200 - 200 = 1000
KSSR Bhd
Statement of profit or loss for the year ended 31 July 2019
RM'000
Revenue 7,150
Cost of sales (4,250)
Gross profit 2,900
Administrative expenses (1,655)
Distribution costs (38)
Finance costs (10% x 200) (20)
Profit before tax 1,187
Tax expenses (50 + 10) (60)
Profit for the year 1,127
(b)
KSSR Bhd
Statement of changes in equity for the year ended 31 July 2019
Ordinary General Retained
shares reserve earnings Total
RM'000 RM'000 RM'000 RM'000
Bal as at 1 Aug 2018 5,250 180 450 5,880
Profit for the year 1,127 1,127
Final dividend (RM0.15 x 2,000) (300) (300)
Transfer to general reserve 30 (30) -
Bal as at 31 Dec 2018 5,250 210 1,247 6,707
Non-current assets schedule
Plant and Delivery Office
Building Van Equipment Total
RM'000 RM'000 RM'000 RM'000
Cost
As at 1 Jul 2018 5,500 400 900 6,800
As at 31 July 2019 5,500 400 900 6,800
Accumulated depreciation
As at 1 Jul 2018 500 80 140 720
Charge for the year 275 32 90 397
As at 31 July 2019 775 112 230 1,117
Net book value
As at 31 July 2019 4,725 288 670 5,683
