Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 1 Mumtaz Bhd is a listed company engaged in developing housing and industrial estate. Below is the trial balance as at 30 June 2020.

QUESTION 1

Mumtaz Bhd is a listed company engaged in developing housing and industrial estate. Below is the trial balance as at 30 June 2020.

Debit

Credit

RM000

RM000

Investment property at fair value

28,660

Intangible assets on 1 July 2019

18,800

Tax recoverable on 1 July 2019

800

Revenue

158,920

Freehold land at valuation

13,400

Buildings at cost

28,400

Plant and machinery at cost

204,400

Accumulated depreciation as at 1 July 2019:

- building

4,260

- plant and machinery

85,140

Inventory on 30 June 2020

4,300

Trade receivables

7,860

Cash at bank

10,900

Ordinary shares of RM1 each

60,000

Distribution costs

4,460

Retained earnings as at 1 July 2019

6,380

Asset revaluation reserve

12,700

Cost of sales

43,780

Administrative expenses

8,560

10% Debentures

31,660

Finance costs

3,680

Income tax paid

5,720

Trade payables

24,660

383,720

383,720

Additional information:

  1. It is the policy of the company to depreciate the building on a straight-line basis. The land is not depreciated. The first revaluation of land result in a surplus of RM3,500,000. On 1 July 2019, the land was revalued at its fair value of RM12,900,000. The company adopts the revaluation model for the land and building.

On 30 June 2020, the building was revalued at fair value of RM30,290,000. The building was previously revalued resulting in a deficit of RM1,000,000. The remaining useful life of the building is 40 years.

  1. On 1 January 2020, Mumtaz Bhd decided to sell one of its plant that was acquired on 1 July 2017 at RM106,000,000. The expected selling price of the plant on that date is RM50,000,000 and a brokerage commission of 2% on the selling price is expected to be incurred.

It is the policy of the company to depreciate the plant and machinery on a yearly basis over a useful life of five (5) years. Depreciation on plant and machinery is charged as part of cost of sales.

  1. The investment property has a fair value of RM29,500,000 on 30 June 2020. The company adopted the fair value model for the investment property.

  1. The company bought a customer lists from their competitor for RM4,500,000 on 30 June 2020, which are expected to give benefit to the company in the future. The transaction has yet to be recorded in the book.

  1. On 1 July 2019, Mumtaz Bhd entered into a contract to lease the machine for 5 years, annual rental payments are RM900,000, payable at the end of each year. The present value of lease liability is RM4,000,000 with incremental borrowing cost of 4%. The contract contains a lease.

  1. The tax charge to profit or loss for the year is estimated to be RM5,180,000.

Required:

Prepare the following statements in a form suitable for publication and in compliance with the relevant Malaysian Financial Reporting Standards.

  1. A statement of profit or loss and other comprehensive income for the year ended 30 June 2020. (Disclosure of earnings per share is required)

  1. A statement of changes in equity for the year ended 30 June 2020.

  1. A statement of financial position as at 30 June 2020. (A note on property, plant and equipment is required)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Managing Business Information Preliminary Edition Volume I

Authors: Thomas L. Albright , Robert W. Ingram

1st Edition

0324061625, 978-0324061628

More Books

Students also viewed these Accounting questions

Question

What primary factors did the group discuss in making each decision?

Answered: 1 week ago

Question

Give details of the use of ICT in workforce planning

Answered: 1 week ago

Question

Explain the various meanings of and approaches to flexible working

Answered: 1 week ago