DELTA Bhd is involved in the manufacturing, packaging and marketing of micro fibre products in Kajang, Selangor. Below is the trial balance of DELTA Bhd for the year ended 31 March 2022: Particulars Revenue Cost of sales Interim dividend paid Administrative expenses Distribution expenses Finance cost Freehold land Building at cost Plant and equipment at cost Accumulated depreciation: Building Plant and equipment Investment property Development cost Investment in fixed deposit 256,000,000 Ordinary share capital Retained earning Asset revaluation reserve Trade receivables and payables Cash and bank [balance before taken into account note (iv) and note (v)] Inventories Income tax paid Debit (RM) 69,310,000 16,000,000 31,025,000 28,331,000 1,900,000 142,600,000 90,650,000 27,000,000 4,628,000 60,800,000 21,200,000 4,184,000 33,000,000 3,658,000 1,651,000 535,937,000 Credit (RM) 169,795,000 9,065,000 17,010,000 256,000,000 66,915,000 16,000,000 1,152,000 535,937,000 vii) The building was acquired on 1 April 2020 and the company carried out some extension to the building amounting to RM_ Building depreciated 10% on cost. The amount was treated as a revenue expenditure. The matter was discovered 1 March 2022. viii) An equipment that was purchased on 1 July 2012 at a cost of RM1,340,000 had a reduction in production capacity since September 2018. This had caused several breakdowns during the production process. The board of directors of DELTA Bhd therefore has identified two possible options: i. ii. Sell the equipment A potential buyer has been located, who has indicated that she would pay 80% of the carrying amount at 30 June 2019. However, they insisted that the equipment is repaired before they buy it. The repair work will be done by DELTA Bhd. employee and will take about 100 hours of skilled labours, the associated cost with this labour is RM9,000. In addition, DELTA Bhd. will have to deliver the equipment to the buyer at cost of RM5,000 and there will be a single premium insurance cost RM600 for the journey Repair the equipment and continue to use it The financial controller has estimated that the present value of cash flows generates from future use (including the repair cost) amount to RM100,000 for remaining useful life with the current interest rate is 10% ix) The board of directors also proposed: a. A dividend of RM0.05 per shares to be paid on the ordinary shares; and b. Transfer to general reserve RM million You are required to perform: a. Statement of Profit and Loss and Other Comprehensive Income for the year ended 31 March 2022 for internal use. [15 marks] [8 marks] [12 marks] b. Statement of Changes in Equity for the year ended 31 March 2022 c. Statement of Financial Position as at 31 March 2022 for internal use. Additional information: i) ii) iii) iv) v) vi) In June 2020, the Financial Controller found a material error, relating to the financial statements of the year ended 31 December 2019. This error related to the overstating of closing inventory by RM No adjustment has been made to correct this error. The board of directors have estimated that the income tax charge for the year ended 31 March 2022 is RM The freehold land was revalued to RM to incorporate the revalued amount in the books of account. The board of directors decided On 1 April 2021, DELTA Bhd leased a large group of machines used in the production process. The lease was for 4 years, and the annual rental (payable in advance) was RM20 million. The interest rate implicit in the lease can be taken as 9% per year. On 1 May 2021, DELTA Bhd began the construction of a new warehouse that was expected to take two years to complete. The construction cost of the warehouse was estimated at RM10 million. The management of DELTA Bhd agreed to finance the construction costs using RM2 million of their cash reserves and by issuing an RM8 million 6% debenture, which has a redemption date of April 2027. The debentures were issued on 1 May 2021. Due to protests by environmentalists, who were concerned about the impact the construction would have on the local eco-system no construction occurred during November and December 2021. During the year ended 31 March 2022, DELTA Bhd entered into a number of short-term investments, using the borrowed money. These investments generated interest income of RM200,000, of which RM50,000 related to the months of November 2021 and December 2021. By 31 March 2022, all interest incurred and earned was paid and received. Plant and equipment are depreciated over their useful life of 4 years. The policy of the company is to depreciate all its assets using the straight-line method, giving full year's depreciation in the year of purchase and none in the year of disposal.