FINAL
Examination Paper
(COVER PAGE)
Session
:
JANUARY 2021
Programme
:
Bachelor of Accountancy (Hons) Programme
Course
:
ACC4215: Advance Financial Reporting Reporting
Date of Examination
:
3 May 2021
Time
:
0900-1215
Reading Time :
–
Duration
:
3 hours 15 minutes
Special Instructions
:
Answer ONE compulsory question in SECTION A and any TWO (2) questions from SECTION
B.
Materials permitted
:
Materials provided
:
Examiner(s)
:
Kiranjeet Kaur
Moderator
:
University of Hertfordshire
This paper consists of 10 printed pages, including the cover page
ACC5214 (F) / Page 2 of 9
INTI INTERNATIONAL UNIVERSITY
BACHELOR OF ACCOUNTANCY (HONS) PROGRAMME
ACC5214: ADVANCED CORPERATE REPORTING
FINAL EXAMINATION: JANUARY 2021 SESSION
This paper consists of TWO (2) sections. Answer ONE compulsory question in SECTION A and
any TWO (2) questions from SECTION B in the answer booklet provided.
Section A: Answer ONE compulsory question.
Question 1
Le Clerc, a public listed company, holds equity interest in the following companies:
Hamilton
Le Clerc acquired 80% of the equity shares of Hamilton on 1 January 2020 for RM 115 million
when the retained earnings of Hamilton stood at RM 15 million and the other reserves stood at
RM25 million. At the date of acquisition, the fair value of the net assets was approximately
equal to their carrying amounts with the exception of a piece of property. The property has a fair
value of RM 25 million in excess of the carrying amount and this would create additional
depreciation of RM 1 million in the post-acquisition period to 31 December 2020.
Perez
Le Clerc acquired 2.4 million shares in Perez on 1 January 2018 for RM 3 million when Perez’s
retained earnings were RM1.2 million. Le Clerc takes an active part in the Perez’s policy
decisions.
Vettel
Hamilton acquired 90% of Vettel on 1 January 2020 for RM 235 million when the retained
earnings of Vettel stood at RM 25 million. On 1 January 2020, the fair values of Vettel’s net
assets were approximately equal to their carrying amounts with the exception of a piece of land.
The land had a fair value of RM 5 million in excess of the carrying amount. The fair values have
not been reflected in the books of Vettel.
Vettel had inventory with a carrying value of RM 2 million which was deemed to have a fair
value of RM 2.4 million. All of this inventory had been sold by 31 December 2020.
ACC5214 (F) / Page 3 of 9
The summarized statements of financial position for the four companies are as follows:
Le Clerc
Hamilton
Vettel
Perez
RM000
RM000
RM000
RM000
Non-current assets
Property, plant and equipment
340,000
173,000
200,000
6,000
Investments
118,000
235,000
1,000
–
Intellectual property
5,000
Current assets
Inventories
125,000
60,000
97,000
4,240
Trade receivables
55,000
28,000
39,000
5,600
Cash and cash equivalents
190,000
56,000
77,000
1,125
———-
———-
———-
———
833,000
414,000
16,965
———-
———-
———-
———
Equity and liabilities
Share capital of RM 1 each
300,000
100,000
200,000
8,000
Retained earnings
290,000
79,000
90,000
2,465
Other reserves
50,000
46,000
30,000
–
Non-current liabilities
Long term borrowings
100,000
155,000
40,000
2,500
Current liabilities
Trade payables
75,000
40,000
2,880
Current tax payable
25,000
97,000
14,000
1,120
833,000
414,000
16,965
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