6. RM'000 0 2 150 1 240 34 150 11 125 4 800 40 000 2 000 The following is the trial balance of Gigantic Bhd. as at 30 June 2018: RM'000 Freehold land 22 000 Building 62 400 Accumulated depreciation - building Plant and equipment 3 750 Accumulated depreciation - plant and equipment Furniture and fittings 4 300 Accumulated depreciation - furniture and fittings Term loan (current portion RM2 525 000) Retained profit Revaluation reserves Ordinary share capital (40 000 000 units @ RM1) Deferred income (government grant) Interim dividend 1 000 Inventory (as at 1 July 2017) 4 287 Cash at bank 8 629 Trade receivables/Trade payables Rental income Sales Production costs 21 669 Return inward 580 Salaries and wages 11 260 EPF and SOCSO 1 328 Utility charges 3 127 Telephone charges 825 Interest on term loan 1 290 Maintenance on building 3 640 Audit and secretarial fees 2 400 Insurance 6 000 Directors' remuneration 1 000 Research and development expenditure 2 880 General administrative expenses 765 Sundry expenses 472 Carriage outwards 609 168 495 4 284 5 016 4 200 63 814 168 495 Additional information: (i) The cost of inventory as at 30 June 2018 was RM6 820 000, whereas the net realisable value less costs to sell was RM9 600 000. However, part of (ii) (iii) the inventory at the cost of RM1 250 000 has to be written down to its net realisable value of RMI 100 000 due to damage. The building was acquired on 1 July 2015 at the cost of RM60 million and useful life of 50 years. On 1 July 2017, the company adopted the revaluation model and the fair value of the building was RM62.4 million. The freehold land was revalued on 30 June 2018 and the fair value was RM26 million. No adjustment has been made for the revaluation. One of the plants costing RM2 million, which was bought on 1 July 2014, has been classified as non-current assets held for sales on 30 June 2018. The fair value of the plants on that date was RM500 000. Depreciation is to be provided as follows: Assets Rate, method and distribution of costs Building Straight-line, remaining useful life 48 years (60 % to distribution costs, 40% to (iv) (v) Plant and equipment administrative expenses). 20% on cost (70% to distribution costs, 30% to administrative expenses) 10% on cost (70% to administrative expenses, 30% to distribution costs) Furniture and fittings (vi) (vii) The deferred income is related to the purchase of furniture and fittings. At the accounting year-end, RM500 000 of the deferred income is to be transferred to the Statement of Profit or Loss. The research and development expenditure as stated in the trial balance comprise of RM1 280 000 research expenses, which does not qualify to be capitalised under MFRS 138. The remaining balance fulfilled all the recognition criteria and therefore should be capitalised as development costs. The company policy is to amortise the development costs over five years period. The board of director has proposed a final dividend of RM0.10 per share. During the financial year, the company issued 10 million ordinary share capital at RM1 each. Corporate tax rate is 24%. (viii) (ix) (xi) Some of the expenses should be distributed as follows: Administrative Distribution Expenses (%) 40 costs (%) 60 Maintenance on building, insurance, telephone charges, utility charges Salary and wages, EPF and SOCSO 60 40 Required: Prepare (a) The Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2018. (15 marks) (b) The Statement of Changes in Equity for the year ended 30 June 2018. (5 marks) (c) The Statement of Financial Position as at 30 June 2018. (10 marks) (d) Notes to the accounts where applicable. (10 marks) 6. RM'000 0 2 150 1 240 34 150 11 125 4 800 40 000 2 000 The following is the trial balance of Gigantic Bhd. as at 30 June 2018: RM'000 Freehold land 22 000 Building 62 400 Accumulated depreciation - building Plant and equipment 3 750 Accumulated depreciation - plant and equipment Furniture and fittings 4 300 Accumulated depreciation - furniture and fittings Term loan (current portion RM2 525 000) Retained profit Revaluation reserves Ordinary share capital (40 000 000 units @ RM1) Deferred income (government grant) Interim dividend 1 000 Inventory (as at 1 July 2017) 4 287 Cash at bank 8 629 Trade receivables/Trade payables Rental income Sales Production costs 21 669 Return inward 580 Salaries and wages 11 260 EPF and SOCSO 1 328 Utility charges 3 127 Telephone charges 825 Interest on term loan 1 290 Maintenance on building 3 640 Audit and secretarial fees 2 400 Insurance 6 000 Directors' remuneration 1 000 Research and development expenditure 2 880 General administrative expenses 765 Sundry expenses 472 Carriage outwards 609 168 495 4 284 5 016 4 200 63 814 168 495 Additional information: (i) The cost of inventory as at 30 June 2018 was RM6 820 000, whereas the net realisable value less costs to sell was RM9 600 000. However, part of (ii) (iii) the inventory at the cost of RM1 250 000 has to be written down to its net realisable value of RMI 100 000 due to damage. The building was acquired on 1 July 2015 at the cost of RM60 million and useful life of 50 years. On 1 July 2017, the company adopted the revaluation model and the fair value of the building was RM62.4 million. The freehold land was revalued on 30 June 2018 and the fair value was RM26 million. No adjustment has been made for the revaluation. One of the plants costing RM2 million, which was bought on 1 July 2014, has been classified as non-current assets held for sales on 30 June 2018. The fair value of the plants on that date was RM500 000. Depreciation is to be provided as follows: Assets Rate, method and distribution of costs Building Straight-line, remaining useful life 48 years (60 % to distribution costs, 40% to (iv) (v) Plant and equipment administrative expenses). 20% on cost (70% to distribution costs, 30% to administrative expenses) 10% on cost (70% to administrative expenses, 30% to distribution costs) Furniture and fittings (vi) (vii) The deferred income is related to the purchase of furniture and fittings. At the accounting year-end, RM500 000 of the deferred income is to be transferred to the Statement of Profit or Loss. The research and development expenditure as stated in the trial balance comprise of RM1 280 000 research expenses, which does not qualify to be capitalised under MFRS 138. The remaining balance fulfilled all the recognition criteria and therefore should be capitalised as development costs. The company policy is to amortise the development costs over five years period. The board of director has proposed a final dividend of RM0.10 per share. During the financial year, the company issued 10 million ordinary share capital at RM1 each. Corporate tax rate is 24%. (viii) (ix) (xi) Some of the expenses should be distributed as follows: Administrative Distribution Expenses (%) 40 costs (%) 60 Maintenance on building, insurance, telephone charges, utility charges Salary and wages, EPF and SOCSO 60 40 Required: Prepare (a) The Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2018. (15 marks) (b) The Statement of Changes in Equity for the year ended 30 June 2018. (5 marks) (c) The Statement of Financial Position as at 30 June 2018. (10 marks) (d) Notes to the accounts where applicable. (10 marks)