Question 2

Twilight Berhad has operated for several years in the construction industry. It has recently developed markets overseas and has had to increase its capital funding in order to expand its operations. The capital structure of the company at 1 April 2020 was as follows: RM000

Ordinary shares of RM0.50 (par/nominal value) 400 Share Premium Account 280 Revaluation Reserve 110 Retained earnings 346 Equity 1,136

8% Debentures (Long-term liabilities) 600

The following information is given in respect of the year ended 31 March 2021: 200,000 ordinary shares were issued on 1 July 2020 at RM2.00 per share. A further RM220,000 of 8% debentures was issued on 1 September 2020 at par value. An ordinary dividend of RM0.20 per share was paid during the year in respect of year

ended 31 March 2021. The profit before tax and interest for the year was RM842,000 on which corporation tax of

RM226,000 is payable.

Required:

(a) Prepare journal entries to record the following (narratives are not required): the issue of ordinary shares. the issue of debentures (loan notes).

2. (b) Prepare the extract from the Statement of Comprehensive Income for the year ended 31 March 2021 starting with profit from operations before interest and tax.

3. (c) Prepare the SOCIE for the year ended 31 March 2021.

Note:

Time-apportionment method must be used when calculating the interest payable on the debentures.