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GROUP 1
MUHAMMAD KHAIRUL ANUAR BIN YUNUSIDA13-07-018
TUAN NUR HIDAYAH AMIRAH BINTI TUAN PADANG IDA 13-01-023
MUHAMAD EMIR IKHWAN BIN SHAZALIIDA13-07-022
BUSINESS COMBINATION : ABOSROPTION
GROUP 1
Kurnia Sdn Bhd was incorporated on 1 July 2010 with an authorized capital of RM1,000,000 divided into 200,000 9% Preference Shares of RM1 each and the balance in Ordinary Shares of RM2 each. On 1 May 2015 the company decided to acquire the business of Loyal Sdn Bhd in other to strengthen their market share.
The statement of financial position of Kurnia Sdn Bhd and Loyal Sdn Bhd on 30 April 2015 were as follows:
Kurnia Sdn BhdRM
Loyal Sdn BhdRM
Goodwill 30,000 14,000
Premises 193,000 168,000
Machinery 35,000 43,000
Inventories 35,000 33,000
Account Receivables 15,000 44,000
Bank 15,000 40,000
323,000 342,000
Ordinary Shares @ RM2 200,000 240,000
9% Preference Shares @RM1 50,000 -
6% Preference Shares @RM1 - 50,000
Retained Profit 30,000 25,000
Share Premium 18,000 25,000
Account Payable 25,000 17,000
323,000 342,000
The following purchase agreement contained the following clauses:
1). Kurnia Sdn Bhd was to take over all the assets and liabilities of Loyal Sdn Bhd.
2). The purchase consideration payable to Loyal Sdn BhdTo the ordinary sahreholders:175,000 Ordinary Shares of Kurnia sdn Bhd, issued at par.
To the preference sharehoders:55,000 9% Preference Shares in Kurnia Sdn Bhd, issyed at par.
3). The cost of liquidation of Loyal Sdn Bhd amounting to RM2,000 is to be paid by Kurnia Sdn Bhd.
4). The agreed values for the assets of Loyal Sdn Bhd are as follows: RM
Premises 268,000Machinery 40,000inventories 32,000Account Receivables 35,000
CONSIDERATION TRANSFERRED
175000 ORDINARY SHARE @ RM2 350,00055000 9% PREFERENCE SHARE @RM1 550,000
405,000(+) LIQUIDATION EXPENSES 2000
407000
(-) FAIR VALUE NET ASSETSPREMISES 268,000MACHINERY 40,000INVENTORIES 32,000ACCOUNT RECEIVABLES 35,000BANK 40,000
(-)TRADE PAYABLES -17,000 -398,000GOODWILL 9,000
SELLER'S BOOKRM RM
1 REALISATION 328,000 PREMISES 168,000 MACHINERY 43,000 INVENTORIES 33,000 ACCOUNT RECEIVABLES 44,000 BANK 40,000 2 REALISATION 14,000 GOODWILL 14,000 3 TRADE PAYABLES 17,000 REALISATION 17,000 4 KURNIA SDN BHD 405,000 REALISATION 405,000 5 ORDINARY SHARE 350,000
PREFERENCE SHARE 55,000 KURNIA SDN BHD 405,000
PREMISES 168,000 TRADE PAYABLE 17,000
MACHINERY 43,000 LOYAL SDN BHD 405,000
INVENTORIES 33,000
ACCOUNT RECEIVABLES 44,000
BANK 40,000
GOODWILL 14,000
SUNDRY MEMBERS:
ORDINARY SHARE 75,000
PREFERENCE SHARE 5,000
422,000 422,000
REALISATION ACCOUNT
ORDINARY SHARE IN KURNIA 350,000 ORDINARY SHARE CAPITAL 240,000
PROFIT AND LOSS 25,000
SHARE PREMIUM 10,000
REALISATION 75,000
350,000 350,000
SUNDRY MEMBER ORDINARY SHARE
9%PREFERENCE SHARE 55,000 6% PREFERENCE SHARE 50,000
REALISATION 5,000
55,000 55,000
SUNDRY MEMBER PREFERENCE SHARE
Buyer’s Ledger
1. Assets acquired
Entries RM RM DR Premises Machinery Inventories Account Receivables Bank
268000 40000 32000 35000 40000
CR Business Purchases 415000
2. Liabilities acquired
Entries RM RM DR Business Purchases 17000 CR Trade payables 17000
3. Purchase consideration transferred
Entries RM RM DR Business Purchases 405000 CR Loyal Sdn Bhd 405000
4. Consideration recorded
Entries RM RM DR Loyal Sdn. Bhd 405000 CR Ordinary Shares 9% Preference shares
350000 55000
5. Balancing up business purchases
Entries RM RM DR Goodwill 9000 CR Business Purchases 9000
Business Purchase
Trade payables 17000 Premises 268000
Loyal Sdn Bhd 405000 Machinery 40000
Liquidation expenses 2000 Inventories 32000
Trade receivables 35000
Bank 40000
Goodwill 9000
424000 424000
Kurnia Sdn Bhd
Statement of Financial Position immediately after the absorption
Non current asstes RM RM
Premises 461 000
Machinery 75 000
Goodwill 39 000
Current assets
Inventories 67 000
Account receivables 50 000
Bank 53 000
745 000
Equities and liabilities
Issued and paid up capital
Ordinary shares 550 000
5% Preference shares 105 000
Retained Profit 30 000
Share Premium 18 000
Account Payables 42 000
745 000
