capital reconstruction

Answer ALL questions SHB Bhd. has been operating for 10 years of financial difficulties and had suffered business losses a few years in a row. The board of directors has agreed to implement the capital reconstruction plan. The following is the statement of the financial position of SHB Bhd. as of 31 March 2020. RM RM Non-Current Assets Land and building 175,000 Plant and Machinery 114,000 Motor vehicles 95.400 Furniture and fixtures 46,000 430,400 Current Assets Inventories 136,600 Trade receivables 75,000 Other receivables 210,000 421,600 Total Assets 852,000 Share Capital and Reserves Ordinary shares at RM0.90 each 540,000 Retained profit (185,000) 355,000 Non-Current Liabilities Bank loan 300,000 Current Liabilities Trade payables 115,000 Cash and cash equivalent 82,000 197,000 Total Equities and Liabilities 852,000 Additional information: 1. One of the motor vehicles purchased by SHB Bhd. on 1 April 2018 at RM20,000 were revealed to be missing from the company. The company policy is to depreciate motor vehicles at a rate of 20% a year on the reducing balance basis. 2. Inventory at 31 March 2020 included some obsolete goods. These had been included in the inventory at their original cost of RM15,000. They could only be sold at half of the normal selling price which was 20% above cost. 3. A customer who owed RM22,000 at 31 March 2020 was declared bankrupt and it is probable that only 25% of the debt is recoverable. No accounting entries had been made for this. 4. On 31 March 2020, SHB Bhd. has to pay a penalty of RM9,700 to the local authority because the fire exits did not meet the safety specifications. No accounting entries had been made for this. 5. Other receivables includes a payment of RM210,000 paid by SHB Bhd. on 1 February 2020, for a 6-month insurance premium to the insurance company for the fire insurance policy. The adjustment at the end of the year has yet to be made. Required: a. Calculate the revised balance of retained earnings at 31 March 2020 after taking into account the items 1 -5 above. (7 mar b. Calculate the reduction in the total ordinary share capital of SHB Bhd. when the scheme of capital reduction is implemented. (3 mark C. Prepare the revised statement of the financial position immediately after the capital reduction scheme undertaken by SHB Bhd (10 mar