QUESTION 1

The trial balance of Abad Baru Sdn Bhd (ABSB) as at 31 December 2020 is listed as follows:

Abad Baru Sdn Bhd

Trial Balance as at 31 December 2020

Descriptions	Debit RM	Credit RM
Bank	130,400
Trade Receivables and Payables	112,000	82,000
Purchases and Sales	432,000	740,000
Purchase and Sales Return	20,000	25,000
Land	500,000
Plant and Machinery (P&M)	120,000
Furniture and Fitting (F&F)	20,000
Inventories	10,000
Bad debts	8,000
Salaries	52,000
Import Duties	7,000
Carriage Inwards	9,500
Stationeries	7,000
Marketing Expenses	11,000
Maintenance Expenses	20,000
Carriage Outwards	28,000
Prepaid Insurance Charges	3,600
Utilities Expenses	7,000
Administrative Expenses	16,500
Sales
Investment Incomes		5,000
Provision for Doubtful Debts		5,000
Accumulated Depreciation:
- P&M		6,000
- F&F		1,000
Bank Loan		100,000
Shareholders Capital		550,000
	1,514,000	1,514,000

Other information:

1. Inventories as at 31 December 2020 was RM15,000.

2. The company management decided to write off further bad debts of RM2,000. Provision for doubtful debts is at 5% of Trade Receivables amount.

3. The bank loan carries an Interest rate of 8% per annum. It is the company policy to pay interest charges at the end of every year.

4. Accrued Expenses: Legal Fees RM3,000, Directors Remunerations RM15,000, Maintenance RM4,000 and Audit Expenses RM3,000.

5. Prepaid Expenses: Stationeries RM2,000 and Marketing Expenses RM1,000.

6. Depreciation charges are at 5% on cost per annum of all depreciable non-current assets.

7. Interest of RM5,000 is yet to be received from the bank.

8. On 31 December 2020, ABSB bought below-mentioned items in which the transactions were not recorded.

1. Investment in shares of RM30,000 through cash.
2. Motor Vehicle through 100% Hire Purchase Loan. The motor vehicle was valued at RM100,000.

Required:

1. Prepare ABSBs Statement of Profit or Loss (post adjustments) for the year ended 31 December 2020.

(20 marks)

2. Prepare ABSBs Statement of Financial Position (post adjustments) as at 31 December 2020.