Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can i get the statement of profit or loss for questions 1 only. QUESTION 1 Gold Bhd manufactures and sells machineries. The financial year of

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

can i get the statement of profit or loss for questions 1 only.

QUESTION 1 Gold Bhd manufactures and sells machineries. The financial year of Gold Bhd ends on 30 June each year. The directors authorised the financial statements for issue on 1 October 2019. Provided below is the trial balance as at 30 June 2019: Debit (RM) Credit (RM) Revenue 615,944,000 Cost of sales 336,000,000 Administrative expenses 72,000,000 Directors' remuneration 432,000 Selling and distribution cost 32,320,000 Finance costs 1,944,000 Investment income 520,000 Trade payables 32,320,000 Tax paid 3,200,000 Ordinary share capital 265,600,000 Retained earnings as at 1 July 2018 76,080,000 Long term loan from Bank of Brunei 18,144,000 Non-Current assets at cost: Land 112,000,000 Buildings 160,000,000 Plant and machinery 62,720,000 Accumulated depreciation at 1 July 2018 Buildings 19,200,000 Plant and machinery 17,920,000 Bank 57,072,000 Investments 137,280,000 Product patents 200,000 Inventories 32,000,000 Trade receivables 40,000,000 Allowance for impairment for trade receivable 1,440,000 1,047,168,000 1,047,168,000 1. Additional information: The revenue figure above includes a credit sale amounting RM1,680,000 which was delivered on 8 July 2019. These goods were included in the closing inventory. 2. On 15 July 2018, the net realisable value of the inventories held as at the year ended 30 June 2019 was valued at RM28,000,000. 3. A customer who owed the company RM200,000 was declared bankrupt on 1 July 2019. None of the amount was expected to be recovered. A long-term loan of BND6,720,000 was taken from the Bank of Brunei on 1 May 2019, The spot rate on that date was RM2.70:BND1. The closing rate on 30 June 2019 was RM2.90:BND1 4 5. 6. It is the company's policy to depreciate its property, plant and equipment on a yearly basis at the following rates: Buildings 3% on cost Plant and Machinery 10% on carrying value On 30 June 2019, the freehold land was revalued to RM136,000,000. The directors decided to incorporate the revalued amount in the books of account During the year ended 30 June 2019, the company was sued by its staff for failure to provide a safe working environment causing him to lose his right hand. The staff claimed for the compensation amounting to RM600,000. The company's lawyer stated that the company would be held liable. A provision of RM890,000 is to be made for audit fees. On 1 August 2019, the company has entered into a contract to purchase a piece of land at a cost of RM25,000,000 The tax expense for the year was estimated to be RM4,400,000 7. 8 a. b. Required: Prepare the following statements for the company in compliance with the Companies Act 2016 and the relevant financial reporting standards: Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2019 (10 marks) Statement of Changes in Equity for the year ended 30 June 2019 (2 marks) Statement of Financial Position as at 30 June 2019 (8 marks) The following notes to accompany the above statements: Property, plant and equipment Contingent liability or capital commitment, if any (6 marks) (Total: 26 marks) C. d. i. ii. QUESTION 2 A The core principle of MFRS15 Revenue from Contracts with Customers is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the considerations to which the entity expects to be entitled in exchange for those goods or services. a b. B. Required: Define the term 'stand-alone price' in accordance with MFRS15 Revenue from Contracts with Customers, (2 marks) List TWO (2) criteria for determining whether a promised good or service is distinct (4 marks) Yummie Bhd is a company supplying kitchen equipment. The company closes its account on 30 June every year. On 1 January 2019, Yummie Bhd sold and delivered equipment to a customer. Yummie Bhd also agreed to service the equipment for one- year period from 1 January 2019 with no additional charge. Both parties agreed with the contract price of RM300,000. The stand-alone selling price of the equipment was RM250,000 and Yummie Bhd would normally expect to receive RM60,000 in consideration for providing one-year service of the equipment Yummie Bhd issued an invoice amounting RM300,000 to the customer on 3 January 2019. The amount was still outstanding as at 30 June 2019. Required: Explain the treatment of these transactions by Yummie Bhd for the year ended 30 June 2019 using the five steps model in MFRS15 Revenue from Contracts with Customers. (10 marks) Prepare the journal entries to record the above contract for the year ended 30 June 2019. (4 marks) (Total: 20 marks) a. b. QUESTION 3 A Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Required: State the differences between each of the following ways of applying the changes in accounting policy as specified in MFRS108 Accounting Policies, Changes in Accounting Estimates and Errors: Retrospective application b. Prospective application a. B. As at 1 July 2018, the retained earnings balance in the books of Harvee Bhd was RM2,500,000. During the financial year ended 30 June 2019, the internal auditor of Harvee Bhd had identified the following situations: 1. The company acquired and recorded a machine on 1 January 2019 at a cost of RM300,000. However, the transportation cost of RM1,000 was treated as revenue expenditure. The useful life of the machine is 10 years and its scrap value is RM50,000. The depreciation charge of RM12,500 was already recorded for that year 2. It was discovered that the company had overcharged a credit customer with a sales amount of RM30,000 on 1 January 2018, 3. The company purchased a plant costing RM 400,000 on 1 July 2015 and depreciated the plant on a straight line basis over 10 years. Starting 1 July 2018, due to heavy usage, the estimated useful life of the machine was revised to 5 years. Required: With reference to MFRS108 Accounting Policies, Changes in Accounting Estimates and Errors: Determine whether it is a change in accounting policy, a change in accounting estimate or an error for each of the above situation. (3 marks) b. Ascertain whether the application of change in the above situations should be adjusted retrospectively or prospectively, (3 marks) Prepare the appropriate journal entries for all of the above situations for the year ended 30 June 2019. (8 marks) Calculate the restated opening balance of the retained earnings as at 1 July 2018 in the books of Harvee Bhd. (3 marks) (Total: 21 marks) a. c. d. QUESTION 4 Explain briefly events after reporting period' in accordance with MFRS110 Events after the Reporting Period. A B. 1. 2. 3 Kristal Bhd closes its accounts on 30 June each year. For the year ended 30 June 2019, the company's financial statements were authorised for issue on 30 September 2019. The following events were identified after 30 June 2019: Kristal Bhd incurred a loss of RM750,000 when its warehouse was damaged due to a fire on 27 July 2019. The insurance company was willing to compensate RM375,000. The company remains as a going concern. On 27 July 2019, Kristal Bhd received a notification from a customer, Black Gem that it had been placed into liquidation and was not able to pay the outstanding balance of RM75,000 to Kristal Bhd. Kristal Bhd has an investment property worth RM1 million in its financial statements at 30 June 2019. On 5 August 2019, the value of the investment property fell significantly due to the recent construction of a flyover in that area. Required: In accordance with MFRS110 Events after the Reporting Period: Ascertain whether the above events are either 'adjusting' or 'non-adjusting event' (3 marks) Explain the accounting treatment of each event in the financial statements of Kristal Bhd. (4 marks) (Total: 10 marks) a b. QUESTION 5 A The objective of MFRS137 Provisions, Contingent Liabilities and Contingent Assets is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to the financial statements to enable users to understand their nature, timing and amount. Required: Differentiate between a probable and possible obligation in accordance with MFRS137 Provisions, Contingent Liabilities and Contingent Assets. (4 marks) b. Explain briefly the THREE (3) criteria required to recognise a provision as a liability a B The following events occurred during the year ended 30 June 2019 for Taming Bhd, a company involved in manufacturing of electrical goods: 1. Taming Bhd has been practicing a policy of allowing its customers to return faulty goods within 3 months from the date of sale, even though the company has no legal obligation to do so. Based on the past experience, it was probable that there would be such returns. Taming Bhd estimates that such returns usually amount to RM3,000 annually. 2. On 1 August 2018, Taming Bhd sued one of its suppliers for failure to provide materials as specified in the contract. Based on the advice from Taming Bhd's lawyers it was virtually certain that the company would win the case and expected to be awarded for compensation. As at 30 June 2019, the court ordered the supplier to pay Taming Bhd RM250,000. As at the year end, Taming Bhd did not yet receive the money 3. On 1 July 2018, Taming Bhd had terminated the service of a sales director for acting outside his authority. As a result, the former sales director submitted a notice of his intention to claim substantial damages for unfair dismissal. On 1 April 2019 a claim for RM300,000 was received by Taming Bhd. The investigation is still on-going and Taming Bhd's legal advisors believe that there is a possibility the company will be held liable. Required: Discuss the accounting treatment for the above events in accordance with the MFRS137 Provisions, Contingent Liabilities and Contingent Assets. (8 marks) b. Advise the management of Taming Bhd on the appropriate journal entries for the above transactions. (4 marks) C. Construct the Statement of Profit or Loss (extract) and the Statement of Financial Position (extract) for the year ended 30 June 2019 (4 marks) (Total: 23 marks) QUESTION 1 Gold Bhd manufactures and sells machineries. The financial year of Gold Bhd ends on 30 June each year. The directors authorised the financial statements for issue on 1 October 2019. Provided below is the trial balance as at 30 June 2019: Debit (RM) Credit (RM) Revenue 615,944,000 Cost of sales 336,000,000 Administrative expenses 72,000,000 Directors' remuneration 432,000 Selling and distribution cost 32,320,000 Finance costs 1,944,000 Investment income 520,000 Trade payables 32,320,000 Tax paid 3,200,000 Ordinary share capital 265,600,000 Retained earnings as at 1 July 2018 76,080,000 Long term loan from Bank of Brunei 18,144,000 Non-Current assets at cost: Land 112,000,000 Buildings 160,000,000 Plant and machinery 62,720,000 Accumulated depreciation at 1 July 2018 Buildings 19,200,000 Plant and machinery 17,920,000 Bank 57,072,000 Investments 137,280,000 Product patents 200,000 Inventories 32,000,000 Trade receivables 40,000,000 Allowance for impairment for trade receivable 1,440,000 1,047,168,000 1,047,168,000 1. Additional information: The revenue figure above includes a credit sale amounting RM1,680,000 which was delivered on 8 July 2019. These goods were included in the closing inventory. 2. On 15 July 2018, the net realisable value of the inventories held as at the year ended 30 June 2019 was valued at RM28,000,000. 3. A customer who owed the company RM200,000 was declared bankrupt on 1 July 2019. None of the amount was expected to be recovered. A long-term loan of BND6,720,000 was taken from the Bank of Brunei on 1 May 2019, The spot rate on that date was RM2.70:BND1. The closing rate on 30 June 2019 was RM2.90:BND1 4 6 8. 5. It is the company's policy to depreciate its property, plant and equipment on a yearly basis at the following rates: Buildings 3% on cost Plant and Machinery 10% on carrying value On 30 June 2019, the freehold land was revalued to RM136,000,000. The directors decided to incorporate the revalued amount in the books of account During the year ended 30 June 2019, the company was sued by its staff for failure to provide a safe working environment causing him to lose his right hand. The staff claimed for the compensation amounting to RM600,000. The company's lawyer stated that the company would be held liable. 7. A provision of RM890,000 is to be made for audit fees. On 1 August 2019, the company has entered into a contract to purchase a piece of land at a cost of RM25,000,000 The tax expense for the year was estimated to be RM4,400,000 Required: Prepare the following statements for the company in compliance with the Companies Act 2016 and the relevant financial reporting standards: Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2019 (10 marks) Statement of Changes in Equity for the year ended 30 June 2019 (2 marks) Statement of Financial Position as at 30 June 2019 (8 marks) d. The following notes to accompany the above statements: i. Property, plant and equipment ii. Contingent liability or capital commitment, if any (6 marks) (Total: 26 marks) a. b C

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Anti Audit Warfare

Authors: Business Management Daily

7th Edition

ISBN: 1540747182, 978-1540747181

More Books

Students also viewed these Accounting questions