Kindex Berhad is a trading company with financial year ending every 31 December. The company is preparing their financial statements for the year ending 31 December 2018 and the following is Kindex Berhad's Trial Balance as at that date.

Kindex Berhad

Trial Balance as at 31 December 2018

Debit (RM'000)

Credit (RM'000)

Property, plant and equipment

65,520

Accumulated depreciation

7,520

Intangible asset

3,780

Inventories - 1 January 2018

81,970

Other Short-term Investments

2,760

Trade Receivables

66,320

Cash and cash equivalents

34,650

Share capital

40,050

Retained earnings - 1 January 2018

82,332

Long-term loans

33,090

Short-term borrowings

46,090

Trade payables

51,310

Revenue

331,080

Allowance for doubtful debt

50

Purchase

229,472

Administrative expenses

34,360

Distribution expenses

64,350

Finance cost

3,630

Taxation expense

1,540

Rental income

3,170

591,522

591,522

Additional information:

a. Depreciation for the financial year ending 31 December 2018 for property, plant and equipment have been charged and included in the accumulated depreciation account in the trial balance.

b. The company received a grant worth RM6,000 on 15 December 2018. It was an incentive by the government for retraining a group of its employees. The three-month training started in December 2018 has a cost of RM10,000 a month.

None of the transactions related to the above has been recorded.

c. Included in the long-term loans is a loan worth RM4,000,000 at 5% annual interest, granted by a local bank on 1 August 2018, for five-year period. Instalment for the month of December 2018 has not been paid yet and the related interest for the instalment was RM15,200.

None of the transactions related to the above has been recorded.

d. The intangible asset was capitalised from the cost of research and development made by the company between 2016 and 2017, recognised in December 2017. The asset that resulted from the research and development process will last for 60 years and it is the company's policy to amortise the intangible assets over 10 years.

No record has been made in relation to the amortisation for the financial year 2018.

e. Kindex Berhad is in the middle of a court case with Kinoyu Berhad. Kindex Berhad refused to accept a batch of goods delivered to it in January 2018 due to its misspecification. Consequently, Kinoyu Berhad is suing Kindex Berhad in August 2018 and asking for a compensation of RM3,000,000 for breaking their trade contract. At the end of December 2018, the lawyers that represent Kindex Berhad gives a 50-50 percent chance to win.

f. Stocktake as at 31 December 2018 revealed inventory cost amount of RM80,600,000. However, one batch of the inventory was damaged and need to be repackaged. The cost of repackaging was RM5,000 to enable it to be sold at RM110,000. The cost for the batch was RM100,000.

Required:

(i) Show the necessary adjusting journal entries for the additional information above.

(ii) Prepare Statement of Profit or Loss and Other Comprehensive Income for financial year ended 31 December 2018 for Kindex Berhad.

(iii) Prepare Statement of Financial Position as at 31 December 2018 for Kindex Berhad.