Additional information:

• The closing inventory at 31 December 2020 was valued at cost RM190,000 and net realizable value was RM225,000.
• The directors decided to revalue the freehold property on 31 December 2020 at the market value of RM7,000,000.
• The companys policy on depreciation of non-current assets are as following:

Furniture and fittings 6% Straight line

Motor vehicles 15% Reducing balance

Freehold property Nil

• The provision for doubtful debts is to be maintained at 5% of the trade receivables at the end of the year.
• A provision for debenture interest due is to be made. At 31 December 2020, there were utilities expenses accrued of RM5,000, and prepaid insurance of RM1,500.
• The directors have declared an ordinary dividend for the year of 2 sen per share, and the outstanding dividend on the preference shares.
• The directors have also decided to transfer RM133,000 to the general reserves account.
• Tax expense on the companys current year profit amounted to RM630,500.
• Number of shares outstanding at 31 December 2020 were as follows:
  • Ordinary shares : 2,200,000
  • 8% preference shares : 2,000,000

Required:

Prepare the following financial statements:

1. Statement of Profit or Loss for the year ended 31 December 2020. (20 marks)

2. Statement of Financial Position as at 31 December 2020. (20 marks)

[Total: 40 marks]

Q1. Season Berhad sells printers to retailers all over Malaysia. The following trial balance has been extracted at 31 December 2020. Dr RM Cr RM 4,400,000 2,000,000 1,000,000 6,200,000 3,000,000 | 600,000 3,700,000 1,300,000 500,000 Ordinary shares 8% preference shares 10% debentures Freehold property (cost) Furniture and fittings (cost) Accumulated depreciation - furniture and fittings Delivery vehicles (cost) Accumulated depreciation - delivery vehicles Retained earnings Debenture interest Interim preference dividend Inventory Trade receivables/payables Bank and cash Purchases/sales Investment income Provision for doubtful debts General reserve Wages and salaries Utilities Insurance Audit fees Directors' emoluments Tax paid Distribution expenses 50,000 80,000 424.000 1,040,000 246,000 3,960,000 760,000 6,940,000 636,000 44,000 1,100,000 100,000 16,000 8,000 12,000 10,000 320,000 114.000 19.280,000 19.280,000