GROUP PROJECT 1 FAR460 JUNE 2022 QUESTION Ringlet Bhd is a Malaysian-based public listed company, involved in agri-business focussing on plantation of local fruits and processing the related products. The financial statements of the company as at 31 December 2015 is as follows: Ringlet Bhd Trial Balance as at 31 December 2015 RM RM Land and building at cost (cost of land RM3,000,000) Accumulated depreciation - building at 1 January 2015 6,090,000 1,090,000 Machinery at cost 1,500,000 Accumulated depreciation - machinery at 1 January 2015 450,000 Investment property 2,750,000 Biological assets 380,000 Inventories 95,000 Receivables Bank Ordinary share capital Retained earnings Dividend paid Reserves 10% Debentures 490,000 4,830,000 5,500,000 2,537,000 1,500,000 1,500,000 2,500,000 Payables Sales Cost of sales Administrative expenses Selling and distribution expenses Finance expenses 1,511,000 9,679,000 3,473,000 2,830,000 542,000 287,000 24,767,000 24,767,000 Additional information: 1. 2. Ringlet Bhd adopts the revaluation model for its land and building. On 2 January 2015, the directors of Ringlet Bhd decided that the land was revalued to RM4,400,000 and the building was revalued to RM2,400,000 with an expected remaining useful life of 30 years. The straight-line depreciation policy on building will continue. It is the policy of the company to measure its machinery and equipment using the cost model and to depreciate on a straight-line method over a 10-year period. Since 2010, Ringlet Bhd has entered into a contract to supply its products to a particular government agency. The rising material costs in 2013 have made the contract price to be lower than the costs of production. Ringlet Bhd has two more years to supply the product at the contract price, which the directors have estimated, will result in the company incurring losses of RM350,000. Ringlet Bhd has no option to exit the contract. 1