Alba Ltd is an electronic and electrical consumer products manufacturing company headquartered in Malaysia. The following items have been extracted from Alba Ltds financial statements for the year ended 30 June 2020.

Net profit	$1,350,000
Shareholders equity	$8,500,000
Net cash flows from operating activities	$2,300,000

As a part of its business growth strategy plan, Alba Ltd intends to expand its operations into Australia. The Chief Financial Officer (CFO) of Alba Ltd has recently approached a local bank in Australia seeking a loan of $4,500,000. The company currently is in a strong financial position and therefore, the CFO of Alba Ltd is confident that the company would qualify for the loan.

The Australian bank traditionally uses the below ratio to assess the Companys ability to generate future cash flows from operations.

• Net cash flows from operating activities to net profit ratio (i.e. Net cash flow from operating activities/net profit).

The generally acceptable ratio for the bank is 1.60 or above. The Australian bank uses International Financial Reporting Standards (IFRS) as a basis for lending decisions. However, Alba Ltd prepares the financial statements using Malaysian Generally Accepted Accounting Principles (GAAP). The CFO of Alba Ltd has noted the following policy differences between the accounts which have been prepared based on Malaysian GAAP and what is required under IFRS in Australia.

1. The company used the LIFO method for inventory valuation. However, IFRS only permits the use of FIFO method. The inventory valuations for the current and previous period are as follows under the two methods:

	Current Period	Previous Period
FIFO	$650,000	$740,000
LIFO	$880,000	$950,000

2. During the current financial year, the company has expensed $220,000 of new product development cost paid and recognised it in the Statement of Profit or Loss. However, the project is technically feasible and therefore qualify to be capitalised under IFRS. It needs to be recognised as an asset in the Balance Sheet (Statement of Financial Position).

3. Interest received of $120,000 and dividend received of $50,000 have been classified as cash flows from financing activities in the current years cash flow statement. Traditionally, interest received, and dividend received were classified as cash flows from operating activities and the company does not have any significant reason for a policy change.

4. The directors of the company have recommended that a dividend of $250,000 be paid in respect of the 2019/2020 financial year. The dividend is required to be approved by the companys shareholders. As of the reporting date, the shareholders had not met to approve this dividend, but the directors have recorded $250,000 as dividends to be paid anyway.

5. The CFO is conservative in its accounting values and decided to make a provision of $500, 000 for any future major repairs that may be undertaken to its manufacturing plant. However, at 30 June 2020 there was no contractual obligation to incur any expenditure due to major repairs expected to be undertaken in future years. Hence, this provision for future repairs cannot be recognised in the financial statements in accordance with IFRS.

Required:

a) Prepare the necessary General Journal entries (Dr and Cr) to adjust the books of Alba Ltd to reflect the requirements of IFRS as at 30 June 2020. Narrations are not required. (10 Marks)