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Montee Bhds list of balances extracted from the General Ledger from the current financial period. Debit Credit 25 million Ordinary Shares Capital 50,000,000 5 million

Montee Bhd’s list of balances extracted from the General Ledger from the current financial period.

Debit

Credit

25 million Ordinary Shares Capital

50,000,000

5 million 6% Preference Shares

5,000,000

6% Debenture

5,700,000

General Reserve

8,300,000

Retained Profits, beginning of year

17,800,000

Development Costs; qualify as intangible

4,600,000

Property [Land RM10 million; Building RM80 million]

90,000,000

Plant and Machinery

3,097,000

Accumulated Depreciation, beginning of year

Buildings

10,500,000

Plant and machinery

1,350,960

Account Receivable and Account Payable

1,070,000

1,553,000

Allowance for Doubtful Debt

21,400

Quoted Investment – 2 million ordinary shares of Saras Bhd

2,640,000

Sales

97,000,000

Sales return and allowance

25,600

Purchase return and allowance

18,200

Purchases

38,200,500

Inventories, beginning of year

12,000,000

Bank

32,500,120

Tax Paid

11,937,160

Interim Preference Dividend paid

100,000

Insurance

54,000

Advertising and Promotional Expenses

225,000

Salesmen's Commission

150,000

Directors' Remuneration

450,000

Auditors Fee

23,600

Income From Investment – Dividend from Saras Bhd

264,000

Office Salaries

560,000

Utilities Expenses

48,000

Rentals

15,800

189,220

Additional information:

Financial accounting period ended

30/9/2019

Ending Inventory was valued at

17 million

Tax Expense assessed

RM13 million

During the year a disposal of plant with a carrying value of RM150,000 (original cost of RM220,000). No adjustment has been made.

Gain RM3k

The company policy on depreciation is based on annual basis and the rates are as follows:

Building; straight line 5%

Plant and Machinery; reducing balance 20%

The 6% debenture was issued at 1 January 2019 at discount of 5%.

A transfer was made to the Retained Profit

60k

An advance rental of building amounting was received. This represents rental for the first 2 months of the next year

RM4k

The allowance for doubtful debt was maintained at …...

1.80%

The final dividend was proposed by the board of directors for the remaining preference shares dividend

Proposed final dividend for the ordinary shares. All the new shares issued during the year are not entitled for the final dividend.

6 sen

Transaction not yet recorded

Offered 3 million 6% preference shares at RM2.50 per share; these were oversubscribed by 500,000 shares

Answer the following questions:

a. Prepare the adjusting journal entries and update the effected accounts

b. Prepare the statement of profit or loss for the internal purpose; showing a clear separation of cost by function.

c. Based on item (a) prepare the financial statement suitable for publication in according with the relevant MFRSs and Companies Act 2016.

Note1: Statement of cash flows is NOT required

Note2: Working for the classification of costs is NOT required

d. Prepare the relevant notes based on the availability of information provided (at least 5 notes)

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