QUESTION 2

Equator Bhd is a merchandising company that prepares its financial statements on 31 December

2019. The companys statement of profit or loss and other comprehensive income, and statement of financial position are shown below:

Equator Bhd

Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2019

	RM000
Revenue	5,440
Cost of goods sold	(2,000)
Gross profits	3,440
Depreciation expense	(100)
Other operating expenses	(1,100)
Gain on sale of land	50
Loss on sale of equipment	(20)
Profit before tax	2,270

Equator Bhd

Statement of Financial Position as at 31 December 2019

	2019	2018
	(RM000)	(RM000)
ASSETS
Current assets
Inventories	310	380
Trade receivables	650	430
Cash and cash equivalents	420	180
	1,380	990
Non-Current assets
Land	1,700	1,800
Property, plant and equipment	3,300	3,000
Accumulated depreciation	(400)	(300)
	5,980	5,490
LIABILITIES
Current liabilities	310	390
Trade payables	650	550
Notes payable	960	940
EQUITY
Share capital	4200	4,000
Retained earnings	820	550
	5,980	5,490

Composition of cash and cash equivalents as at 31 December 2019:

	2019 (RM)	2018 (RM)
Cash	20,000	70,000
Short-term investment	400,000	110,000

Additional information:

1. Dividends paid for the year amounted to RM2,000,000
2. For land as well as property, plant and equipment, the following occurred during the year:

• Purchase of a machine at cost of RM400,000.
• A piece of land bought for RM100,000 and sold at RM150,000
• An equipment that cost RM120,000 with a carrying value of RM100,000 was sold for RM80,000.

Required:

Based on the information given, prepare the statement of cash flows for Equator Bhd for the year ended 31 December 2019.