Submitted by: Submitted by chuminfseng
Views: 345
Words: 1884
Pages: 8
Category: Business and Industry
Date Submitted: 05/26/2012 06:33 PM
CORPORATE REPORTING ASSIGNMENT
On 1 January 2005 Upper Ltd acquired 60% of the shares in Lower Ltd for RM25,000
On that date the equity in Lower Ltd consisted of:
Share capital RM15,000
Revaluation surplus RM3,000
General reserve RM5,000
Retained profits RM7,000
The directors of Upper Ltd believed the equity in Lower Ltd reflected the fair value of net assets with the exception of Land which was (and continues to be) carried at RM2,000 below its market value.
Details of intragroup inventory sales for the year ended 31 December 2010 were:
* Upper Ltd sold inventory with a carrying amount of RM22,000 to Lower Ltd for RM30,000. 15% of this inventory was held by Lower Ltd held at the end of the year.
* Lower Ltd sold inventory with a carrying amount of RM10,000 to Upper Ltd for RM15000. 60% of this inventory was held by Upper Ltd held at the end of the year.
Details of intragroup inventory sales for the year ended 31 December 2011 were:
* Upper Ltd sold inventory with a carrying amount of RM15,000 to Lower Ltd for RM25,000. 40% of this inventory was held by Lower Ltd held at the end of the year.
* Lower Ltd sold inventory with a carrying amount of RM12,000 to Upper Ltd for RM20000. 25% of this inventory was held by Upper Ltd held at the end of the year.
During 2011 all upstream sales were for cash while all downstream sales were on credit with 5% remaining outstanding at the end of the year.
Since the beginning of the current year Lower Ltd has rented unused office space to Upper Ltd at the rate of RM150 per month. Each month's rent is paid in advance on the final day of the previous month.
On 1 August 2009 Upper Ltd provided Lower Ltd a 5-year interest-only loan of RM3,600 at 10% p.a. Interest is charged quarterly in arrears from the date of the loan.
On 31 December 2007 Lower Ltd sold to Upper Ltd an item of machinery with a carrying amount of RM14,800 for RM20,000. Upper Ltd has depreciated this asset...