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Jan. - April 2020 Groups BA107 Financial Accounting & BL210 Financial Report Sandals Question 3 Grace Berhad imports spices from India and China and then repacks them into smaller quantities for sale to retailers in the Asia-Pacific region. In 2019, it redeemed all the redeemable preference shares at a premium of 8%. To finance the redemption and to generate additional funds for the company. a fresh issue of 500,000 ordinary shares at RM1.000.000 was made The new shares were over-subscribed by 25 times. An amount of RM20.000 was incurred as expenses for the share application. This amount was transferred from the Statement of Profit or Loss to ordinary share capital. The financial statements of Grace Berhad for 2019 were as below: Grace Berhad Statement of Profit or Loss for the year ended 31 December 2019 RM1000 Sales Cost of sales Gross profits Other operating expenses 1.980.00 Depreciation expense 120.00 RM 000 6,000.00 (2,100.00) 3,900.00 (2,100.00) Other comprehensive income Gain on disposal of land Loss on sale of equipment 50.00 Net profits before tax for the year Tax expense Net profits after tax for the year Net profits b/f Net profits of 50.00 1,850.00 (400.00) 1,450.00 $50.00 2.000,00 2018 RM 000 Grace Berhad Statement of Financial Position as at 31 December 2019 RM000 Non-current assets Land 1,700.00 Property, plant & equipment @ cost 3,300.00 Property, plant & equipment @ accumulated depreciation (400.00) 1.800.00 3.000.00 (300.00) 4,600.00 4,500.00 500.00 Current assets Inventories Trade receivables Cash and cash equivalents 804.00 900.00 1,300.00 400.00 300.00 Page 2 of 5 Jon April 20.30 Group Assignment R BL10 Facial Accounting 14 ial Reports Total assets 3,004.00 1.200.00 2019 RM1000 2018 RM000 Current liabilities Trade payable Tax payable 400.00 80000 1,200.00 6,404.00 500.00 600.00 1,100.00 4,600,00 Net assets Ordinary share capital Retained profits 4% redeemable preference shares 4,580.00 1.824.00 3.600,00 550.00 450.00 4,600.00 6,404.00 Grace Berhad Statement of Changes in Equity for the year ended 31 December 2019 Ordinary Preference share capital shares RM000 RM 000 Opening balance 3,600.00 450.00 Profit for the year Premium on redemption Dividends Redemption of preference shares (450.00) Issue of new shares 1,000.00 Closing balance 4,600.00 Retained profits RM000 550.00 1,430.00 (36.00) (140.00) 1,804.00 Additional information: Dividends of RM140,000 were paid during the year. The following events occurred during the year with regards to the land as well as property, plant and equipment: Purchase a machine for RM400.000 A piece of land bought 3 years ago for RM100,000 was sold for RM150.000 Sold an equipment which cost RM100,000 with an accumulated depreciation of RM20,000 for RM80,000 Required: Prepare the journal entries to record the redemption of redeemable preference shares in 2019. (9 marks) (b) Prepare the necessary workings and T-accounts to support the preparation of the Statement of Cash Flows. (13.5 marks) Page 3 of 5 Question 3 Grace Berhad imports spices from India and China and then repacks them into smaller quantities for sale to retailers in the Asia-Pacific region. In 2019, it redeemed all the redeemable preference shares at a premium of 8%. To finance the redemption and to generate additional funds for the company, a fresh issue of 500,000 ordinary shares at RM1,000,000 was made. The new shares were over subscribed by 2.5 times. An amount of RM20,000 was incurred as expenses for the share application. This amount was transferred from the Statement of Profit or Loss to ordinary share capital. The financial statements of Grace Berhad for 2019 were as below: Grace Berhad Statement of Profit or Loss for the year ended 31 December 2019 RM 000 Sales Cost of sales Gross profits Other operating expenses 1.980.00 Depreciation expense 120.00 RM"000 6,000.00 (2,100.00) 3,900.00 (2.100.00) Other comprehensive income Gain on disposal of land Loss on sale of equipment 50.00 Net profits before tax for the year Tax expense Net profits after tax for the year Net profits b/f Net profits et 50.00 1,850.00 (400.00) 1.450.00 550.00 2,000.00 2018 RM1000 Grace Berhad Statement of Financial Position as at 31 December 2019 RM 000 Non-current assets Land 1,700.00 Property, plant & equipment @ cost 3,300.00 Property, plant & equipment @ accumulated depreciation (400.00) 1.800.00 3,000.00 (300.00) 4,600.00 4.500.00 Current assets Inventories Trade receivables Cash and cash equivalents 804.00 900.00 1,300.00 500.00 400.00 300.00 Page 2 of 5 Total assets 3.004.00 1.200.00 2019 RM 000 2018 RM 000 Current liabilities Trade payable Tax payable 400.00 800.00 1,200.00 6,404.00 500.00 600.00 1,100.00 4,600.00 Net assets Ordinary share capital Retained profits 4% redeemable preference shares 4,580.00 1.824.00 3.600.00 550.00 450.00 4.600.00 6,404.00 Grace Berhad Statement of Changes in Equity for the year ended 31 December 2019 Ordinary Preference share capital shares RM'000 RM 000 Opening balance 3,600.00 450.00 Profit for the year Premium on redemption Dividends Redemption of preference shares (450.00) Issue of new shares 1.000.00 Closing balance 4.600.00 Retained profits RM'000 550.00 1.430.00 (36.00) (140.00) 1.804,00 Additional information: Dividends of RM140,000 were paid during the year. The following events occurred during the year with regards to the land as well as property, plant and equipment: Purchase a machine for RM 400,000 A piece of land bought 3 years ago for RM100,000 was sold for RM150,000 Sold an equipment which cost RM100,000 with an accumulated depreciation of RM20,000 for RM80,000 Required: Prepare the journal entries to record the redemption of redeemable preference shares in 2019. (9 marks) Prepare the necessary workings and T-accounts to support the preparation of the Statement of Cash Flows. (13.5 marks) Page 3 of 5 (c) Present the Statement of Cash Flows for the year ended 31 December 2019 using the indirect method according to the MFRS 107 format. (8 marks) (d) Present the Statement of Changes in Cash and Cash Equivalent for the year ended 31 December 2019. (4 marks) (e) The Companies Act 2016 replaces the Companies Act 1965 with effect from 1 January 2018, explain at least FOUR (4) changes to the share structures of companies and the responsibilities of board of directors. (8 marks) (Total: 42.5 marks) Jan. - April 2020 Groups BA107 Financial Accounting & BL210 Financial Report Sandals Question 3 Grace Berhad imports spices from India and China and then repacks them into smaller quantities for sale to retailers in the Asia-Pacific region. In 2019, it redeemed all the redeemable preference shares at a premium of 8%. To finance the redemption and to generate additional funds for the company. a fresh issue of 500,000 ordinary shares at RM1.000.000 was made The new shares were over-subscribed by 25 times. An amount of RM20.000 was incurred as expenses for the share application. This amount was transferred from the Statement of Profit or Loss to ordinary share capital. The financial statements of Grace Berhad for 2019 were as below: Grace Berhad Statement of Profit or Loss for the year ended 31 December 2019 RM1000 Sales Cost of sales Gross profits Other operating expenses 1.980.00 Depreciation expense 120.00 RM 000 6,000.00 (2,100.00) 3,900.00 (2,100.00) Other comprehensive income Gain on disposal of land Loss on sale of equipment 50.00 Net profits before tax for the year Tax expense Net profits after tax for the year Net profits b/f Net profits of 50.00 1,850.00 (400.00) 1,450.00 $50.00 2.000,00 2018 RM 000 Grace Berhad Statement of Financial Position as at 31 December 2019 RM000 Non-current assets Land 1,700.00 Property, plant & equipment @ cost 3,300.00 Property, plant & equipment @ accumulated depreciation (400.00) 1.800.00 3.000.00 (300.00) 4,600.00 4,500.00 500.00 Current assets Inventories Trade receivables Cash and cash equivalents 804.00 900.00 1,300.00 400.00 300.00 Page 2 of 5 Jon April 20.30 Group Assignment R BL10 Facial Accounting 14 ial Reports Total assets 3,004.00 1.200.00 2019 RM1000 2018 RM000 Current liabilities Trade payable Tax payable 400.00 80000 1,200.00 6,404.00 500.00 600.00 1,100.00 4,600,00 Net assets Ordinary share capital Retained profits 4% redeemable preference shares 4,580.00 1.824.00 3.600,00 550.00 450.00 4,600.00 6,404.00 Grace Berhad Statement of Changes in Equity for the year ended 31 December 2019 Ordinary Preference share capital shares RM000 RM 000 Opening balance 3,600.00 450.00 Profit for the year Premium on redemption Dividends Redemption of preference shares (450.00) Issue of new shares 1,000.00 Closing balance 4,600.00 Retained profits RM000 550.00 1,430.00 (36.00) (140.00) 1,804.00 Additional information: Dividends of RM140,000 were paid during the year. The following events occurred during the year with regards to the land as well as property, plant and equipment: Purchase a machine for RM400.000 A piece of land bought 3 years ago for RM100,000 was sold for RM150.000 Sold an equipment which cost RM100,000 with an accumulated depreciation of RM20,000 for RM80,000 Required: Prepare the journal entries to record the redemption of redeemable preference shares in 2019. (9 marks) (b) Prepare the necessary workings and T-accounts to support the preparation of the Statement of Cash Flows. (13.5 marks) Page 3 of 5 Question 3 Grace Berhad imports spices from India and China and then repacks them into smaller quantities for sale to retailers in the Asia-Pacific region. In 2019, it redeemed all the redeemable preference shares at a premium of 8%. To finance the redemption and to generate additional funds for the company, a fresh issue of 500,000 ordinary shares at RM1,000,000 was made. The new shares were over subscribed by 2.5 times. An amount of RM20,000 was incurred as expenses for the share application. This amount was transferred from the Statement of Profit or Loss to ordinary share capital. The financial statements of Grace Berhad for 2019 were as below: Grace Berhad Statement of Profit or Loss for the year ended 31 December 2019 RM 000 Sales Cost of sales Gross profits Other operating expenses 1.980.00 Depreciation expense 120.00 RM"000 6,000.00 (2,100.00) 3,900.00 (2.100.00) Other comprehensive income Gain on disposal of land Loss on sale of equipment 50.00 Net profits before tax for the year Tax expense Net profits after tax for the year Net profits b/f Net profits et 50.00 1,850.00 (400.00) 1.450.00 550.00 2,000.00 2018 RM1000 Grace Berhad Statement of Financial Position as at 31 December 2019 RM 000 Non-current assets Land 1,700.00 Property, plant & equipment @ cost 3,300.00 Property, plant & equipment @ accumulated depreciation (400.00) 1.800.00 3,000.00 (300.00) 4,600.00 4.500.00 Current assets Inventories Trade receivables Cash and cash equivalents 804.00 900.00 1,300.00 500.00 400.00 300.00 Page 2 of 5 Total assets 3.004.00 1.200.00 2019 RM 000 2018 RM 000 Current liabilities Trade payable Tax payable 400.00 800.00 1,200.00 6,404.00 500.00 600.00 1,100.00 4,600.00 Net assets Ordinary share capital Retained profits 4% redeemable preference shares 4,580.00 1.824.00 3.600.00 550.00 450.00 4.600.00 6,404.00 Grace Berhad Statement of Changes in Equity for the year ended 31 December 2019 Ordinary Preference share capital shares RM'000 RM 000 Opening balance 3,600.00 450.00 Profit for the year Premium on redemption Dividends Redemption of preference shares (450.00) Issue of new shares 1.000.00 Closing balance 4.600.00 Retained profits RM'000 550.00 1.430.00 (36.00) (140.00) 1.804,00 Additional information: Dividends of RM140,000 were paid during the year. The following events occurred during the year with regards to the land as well as property, plant and equipment: Purchase a machine for RM 400,000 A piece of land bought 3 years ago for RM100,000 was sold for RM150,000 Sold an equipment which cost RM100,000 with an accumulated depreciation of RM20,000 for RM80,000 Required: Prepare the journal entries to record the redemption of redeemable preference shares in 2019. (9 marks) Prepare the necessary workings and T-accounts to support the preparation of the Statement of Cash Flows. (13.5 marks) Page 3 of 5 (c) Present the Statement of Cash Flows for the year ended 31 December 2019 using the indirect method according to the MFRS 107 format. (8 marks) (d) Present the Statement of Changes in Cash and Cash Equivalent for the year ended 31 December 2019. (4 marks) (e) The Companies Act 2016 replaces the Companies Act 1965 with effect from 1 January 2018, explain at least FOUR (4) changes to the share structures of companies and the responsibilities of board of directors. (8 marks) (Total: 42.5 marks)