Question 1 I-Whale Bhd. (I-Whale), a public listed company, had… Question 1I-Whale Bhd. (I-Whale), a public listed company, had acquired Dolphin Bhd. (Dolphin) on 1September 2021.The following are the draft statements of financial position of I-Whale and Dolphin as at 31 March2022:I-Whale DolphinASSETS RM’000RM’000Non-current assetsProperty, plant and equipment288,60074,400Investment Property75,40016,800Investments34,2005,100398,20096,300Current assetsInventories22,00011,200Trade and other receivables19,4007,700Bank and cash balances2,8001,50044,20020,400Total assets442,400116,700EQUITY AND LIABILITIESEquityOrdinary shares270,00082,600Preference shares75,600 -Revaluation reserve35,60011,200Retained earnings27,9009,600409,100103,400Non-current liabilitiesLoan notes11,2005,600Deferred tax liability4,70070015,9006,300Current liabilitiesTrade and other payables16,6004,200Tax payables8002,80017,4007,000Total equity and liabilities442,400116,700 The following information is relevant:1. On 1 September 2021, I-Whale acquired 84% of the 64 million equity shares of Dolphin. I-Whale made and immediate cash payment of RM0.35 per share and a share exchange of 2shares in I-Whale for every 5 shares acquired in Dolphin. The market price of each I-Whaleshare at the date of acquisition was RM3.08.Only the cash consideration of the above investments has been recorded by I-Whale.The revaluation reserve and retained earnings of Dolphin at the acquisition date were RM9.4million and RM8.5 million respectively.Dolphin did not issue any shares after the acquisition of its shares by I-Whale.2. At the date of acquisition, the fair values of the net assets of Dolphin were equal to theircarrying amounts with the exception of the following plant and machinery. The detail of theare as follows:Plant MachineryRemaining expected useful life(at the date of acquisition)38 months 42 monthsRM’000 RM’000Carrying value 25,000 13,500Fair value 17,300 14,800Dolphin uses straight-line depreciation. Dolphin has not incorporated the above fair valuechanges into its financial statements as at 31 March 2022.3. I-Whale policy is to value the non-controlling interest at fair value at the date of acquisition.Dolphin’s share price of RM1.64 per share at that date can be deemed to be representative ofthe fair value of the shares being held by non-controlling interest.4. Sales from I-Whale to Dolphin in the post-acquisition period were RM5.3 million. I-Whaleapplied a mark-up of 24% on these sales. Dolphin manage to sell two-thirds of these goods asat 31 March 2022.5. I-Whale’s trade receivables at 31 March 2022 included RM550,000 due from Dolphin whichdid not agreed with Dolphin’s corresponding trade payable. This was due to cash in transit ofRM130,000 from Dolphin to I-Whale. The cash was not received by I-Whale until 2 April2022.6. I-Whale and Dolphin’s property had previously been revalued upwards, leading to thebalances in revaluation surplus as at 1 April 2021. As at 31 March 2022, I-Whale revalued itsgroups land and building by a professional valuer. The detail of the valuations are as follows:- I-Whale : Revaluation surplus of RM4.7 million- Dolphin : Revaluation deficit of RM1.2 million7. An impairment test at 31 March 2022 on consolidated goodwill concluded that it should beimpaired by RM2.8 million. No other assets were impaired.8. Assume, except where indicated otherwise, that all the profits accrued evenly throughout theyear.Required:Prepare the consolidated statement of financial position of I-Whale Bhd. Group as at 31 March 2022.[Total: 26 marks] Accounting Business Financial Accounting BBFA 2054
