AMALGAMATION (FA5 KPMBP)
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1) Sister Sdn Bhd and Hood Sdn Bhd agreed to combine their businesses to form a new company called Sisterhood Sdn Bhd. 2) Sister Sdn Bhd contributed assets and liabilities worth RM423,500 while Hood Sdn Bhd contributed RM313,000. Goodwill of RM19,060 arose from the amalgamation. 3) Sisterhood Sdn Bhd issued shares worth RM270,000 to Sister Sdn Bhd and Hood Sdn Bhd as purchase consideration. It also issued additional shares of RM420,000 which were fully subscribed.
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AMALGAMATION (FA5 KPMBP)
- 1. PREPARED FOR: PUAN NOORMALA BINT MD NOORFINANCIAL ACCOUNTING 5 NADIAH BINTI NAZERI PDA1506003 NURAISYAH FITRIE BINTI ABDULLAH PDA1506025 NURUL AFIZA BINTI ZUKI PDA1506 MOHD FIRDAUS BIN ZUKI PDA1506 KOLEJ PROFESIONAL MARA BANDAR PNAWAR CLASS : DIA5B
- 2. COMBINATION OF TWO OR MORE COMPANIES TO FORM A NEW COMPANY A + B = AB WHAT IS AMALGAMATION?
- 3. Sister Sdn Bhd and Hood Sdn Bhd have agreed to combine their business and to form a new company which is Sisterhood Sdn Bhd. COMPANY’S NAME
- 4. Sister Sdn Bhd Hood Sdn Bhd Ordinary Share 72,000 Ordinary Shares in Sisterhood Sdn Bhd issued at RM 2.50 60,000 Ordinary Share in Sisterhood Bhd issued at RM2.50 10% Preference Share 20,000 10% in Sisterhood Bhd at premium of RM 0.20 30,000 10% Preference Share in Sisterhood Bhd at par value. 10% Debentures RM 80,000 8% Debentures in SisterHood Sdn Bhd to discharge the 10% Debentures of Sister Sdn Bhd at a premium of 30% - PURCHASE CONSIDERATION
- 5. Sister Sdn Bhd (RM) Hood Sdn Bhd (RM) Land & Building 250,000 200,000 Trade Receivables Bad debts incurred of 7% Bad debts incurred of 10% Inventories 5% were obsolete 4% were obsolete Trade Payables 48, 000 38,000 ASSETS AND LIABILITY TAKEN OVER
- 6. LIQUIDATION EXPENSES Sister Sdn Bhd amounted to RM 7500 Hood Sdn Bhd amounted RM 5000 Both to be paid by SisterHood Sdn Bhd. FORMATION EXPENSES SisterHood Sdn Bhd had incurred and paid formation expenses of RM 10,000. EXPENSES
- 7. SisterHood Sdn Bhd had issued 100,000 Ordinary Shares to new shareholders at RM 4.20 These shares were fully subscribed & paid. ISSUANCE OF SHARE SOLD OF ASSET
- 8. Sister Sdn Bhd Hood Sdn Bhd Total Purchase Consideration: Ordinary Share Capital 180000 150000 330000 10% Preference Share Capital 84000 120000 204000 8% Debentures 104000 368000 0 270000 104000 638000 (+) Liquidation Expenses 7500 5000 12500 375500 275000 650500 (-)Assets Taken Over Land & Building 250000 200000 450000 Trade Receivable 65100 45000 110100 Inventories 100700 56640 157340 (-)Trade Payable (48000) 367800 (38000) 263640 (86000) 631440 Goodwill 7700 11360 19060 GOODWILL
- 9. TRANSACTIONS DEBIT CREDIT Purchase Consideration SisterHood Sdn Bhd 368000 Realisation Account 368000 Asset & Liabilities Taken Over Realisation Account 271000 Trade Payable 48000 Land & Building 190000 Inventories 106000 Trade Receivable 23000 Sold off Fixture & Fittings Bank 190000 Fixtures & Fittings 120000 Realisation 70000 JOURNAL IN SISTER SDN BHD’S BOOK
- 10. JOURNAL IN SISTER SDN BHD’S BOOK Transfer Capital and Reserves General Reserve 68000 Retained Profit 53000 Ordinary Share Capital 180000 Realisation Account 301000 Balancing off Realisation Account Realisation Account 92000 TRANSACTION DEBIT CREDIT Debentures Settled Off 10% Debentures 80000 Realisation Account - Debenture Holders 24000 8% Debentures 104000 Balancing off Preference Share Capital 10% Preference Share Capital 80000 Realisation Account 4000 Sundry Members Account- Preference Shareholder 84000
- 11. TRANSACTION DEBIT CREDIT Assets Not Taken Over Sundry Members Account 213000 Bank 213000 Purchase Consideration Received Ordinary Share Capital 180000 8% Preference Share Capital 84000 8% Debentures 104000 SisterHood Sdn Bhd 368000 Settlement of Preference Share Capital Sundry Members Account - Sister Sdn Bhd 84000 Preference Share Capital - SisterHood Sdn Bhd 84000 JOURNAL IN SISTER SDN BHD’S BOOK
- 12. LEDGERS ENTRIES OF HOOD SDN BHD Realisation Account Land & Building 120000 SisterHood Sdn Bhd 270000 Inventories 59000 Trade Payable 38000 Trade Receivables 50000 Fixture & Fittings - Loss 10000 Sundry Members Account 69000 308000 308000 Sundry Members Account Ordinary Preference Ordinary Preference Share Share Share Share SisterHood Sdn Bhd 150000 120000 Share Capital 150000 120000 Bank 130000 General Reserve 26000 Retained Profit 35000 Realization 69000 280000 120000 280000 120000
- 13. Fixture & Fittings Account Balance b/d 130000 Bank 120000 Realisation - Loss 10000 130000 130000 Bank Account Balance b/d 10000 Sundry Members Account 130000 Fixtures & Fittings 120000 130000 130000 SisterHood Sdn Bhd Account Realisation Account 270000 Shares in SisterHood Sdn Bhd: Ordinary Shares 150000 Preference Shares 120000 270000 270000 LEDGERS ENTRIES OF HOOD SDN BHD
- 15. JOURNAL ENTRIES TRANSACTION DEBIT CREDIT Opening of SisterHood Sdn Bhd Business Puchase 736500 Sister Sdn Bhd 423500 Hood Sdn Bhd 313000 Assets & Liability Acquired Goodwill 19060 Land & Building 450000 Trade Receivables 110100 Inventories 157340 Business Purchase 638000 Trade Payable 86000 Liquidation Expenses 12500
- 16. TRANSACTION DEBIT CREDIT Formation Expenses Formation Expenses 10000 Bank 10000 Balance off Business Purchase Account Goodwill 19060 Business Purchase 19600 Purchase Consideration Paid Sister Sdn Bhd & Hood Sdn Bhd 270000 Ordinary Share Capital 150000 10% Preference Share Capital 120000 Issuance of Additional Shares Bank 420000 Ordinary Share Capital 250000 JOURNAL ENTRIES
- 17. Business Purchase Account Sister Hood Sister Hood Sdn Bhd Sdn Bhd Sdn Bhd Sdn Bhd Liquidators 264000 270000 Goodwill 7700 11360 Trade Payable 48000 38000 Land & Building 250000 200000 Liquidation Expenses 7500 5000 Trade Receivable 65100 45000 Debenture Holders 104000 0 Inventories 100700 56640 423500 313000 423500 313000 Bank Account Ordinary Share Capital 420000 Formation Expenses 10000 Liquidation Expenses 12500 Balance c/d 397500 420000 420000 LEDGERS ACCOUNT
- 18. RM RM Non Current Asset Land & Building 450000 450000 Goodwill 19060 19060 Current Asset Trade Receivables 110100 Inventories 157340 Bank 397500 Formation Expenses 10000 674940 1144000 STATEMENT OF FINANCIAL POSITION AS AT 1 JAN 2017
- 19. Shares & Equity Ordinary Share Capital at RM 2.50 each 580000 8% Preference Share Capital at RM 4.00 each 200000 Share Premium 174000 954000 Non Current Liability 8% Debentures 104000 104000 Current Liability Trade Payable 86000 86000 1144000 STATEMENT OF FINANCIAL POSITION AS AT 1 JAN 2017
- 20. NADIAH NAZERI NURAISYAH AFIZA ZUKI FIRDAUS ZUKI PREPARED BY: