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Question 2 On 31 December 2018, Bali Berhad acquired a 100% interest in Phuket Berhad...

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Question 2 On 31 December 2018, Bali Berhad acquired a 100% interest in Phuket Berhad paying RM1,000,000 in cash and the balance by issuing 285,000 Bali's Berhad ordinary shares with a market value of RM2.00 each. The respective statements of financial position of the two companies are as follows: Phuket Bali Berhad Berhad RM'000 RM'000 Property, plant and equipment: Properties Plant and machinery Current assets 2,000 600 800 400 1,400 4,000 600 1,800 Share capital issued at RM1 each Retained profits General reserves 800 2,000 900 200 200 300 Long-term liabilities Current liabilities 600 400 200 200 1,800 4,000 In arriving at the purchase consideration, the buyer and seller took into account the following items: The fair value of Phuket Berhad's properties was RM750,000. Phuket Berhad owned patents and licenses with a fair value of RM500,000. Phuket Berhad had a pending lawsuit in which the lawyer advised that there was a 40% chance that the company would lose the case and would then have to pay RM200,000. Required: Prepare the Consolidated Statement of Financial Position as at 31 December 2018

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