Additional information:

• On 1 July 2020, Fleuronce Bhd acquired a new plant at its fair value of RM2,400,000. This entry has been omitted in the above trial balance. In order to finance the acquisition of the plant, the company issued 2,400,000 units of ordinary shares at RM1 per share. All the shares were fully subscribed and paid for but have yet to be recorded in the accounts as at year end.
• It is the policy of the company to depreciate plant and machinery and equipment at 20% on cost based on period of ownership. No depreciation or amortisation has yet been charged on any non-current asset for the year ended 30 June 2021.
• On 1 July 2020, the freehold land and building were revalued to RM160,000,000 and RM110,000,000 respectively. The land and building have been revalued before on 1 July 2013 resulting in a surplus of RM 50,000,000 and RM11,000,000 respectively. The remaining useful life of the building as at 1 July 2020 was 20 years. The company adopts the revaluation model for the land and building. The company makes an annual transfer from revaluation reserve to retained profits in respect of the realisation of revaluation surplus.
• The closing inventories include some obsolete goods costing RM700,000 that can only be sold for RM500,000.
• At end of the year, a patent with carrying amount of RM453,000 was sold at RM270,000. The fair value of the remaining intangible asset at 30 June 2021 was valued at RM300,000. The economic life of all the intangible asset is indefinite. No record was found on any of these transactions.
• The taxation charge for the year is estimated to be RM8,500,000. This amount does not include an increase in deferred tax liability by RM200,000.

a)iii) Fleuronce Bhds directors decided to redeem the redeemable preference shares out of profits available for dividends. Explain the consequences of this redemption.

Fleuronce Berhad is a company producing cosmetic appliances throughout Malaysia. The following is the trial balance as at 30 June 2021: Debit RM'000 Credit RM'000 230,160 5,200 126,800 24,700 12,300 3,510 850 61,000 14,500 15,500 13,700 15,580 3,600 Revenue Investment income Cost of sales Administrative expenses Selling and distribution expenses Finance charges Redeemable preference dividend paid Asset revaluation reserve Trade receivables and payables Inventory Bank overdraft Deferred tax liability at 1 July 2020 Freehold land at valuation as at 1 July 2020 Building at valuation as at 1 July 2020 Plant and machinery at cost on 1 July 2020 Equipment at cost on 1 July 2020 Accumulated depreciation at 1 July 2020: Building Plant and machinery Equipment Ordinary share capital at 1 July 2020 5% Redeemable preference share capital Retained profit at 1 July 2020 Tax paid Intangible asset Total 96,000 100,000 62,000 17,000 5,000 6,200 5,100 100,000 17,000 16,000 6,200 780 479,340 479,340