QUESTION 3

The following is a draft trial balance of DeLyod Sdn Bhd as at 31 December 2019.

Debit RM Credit RM Profit for the year (before adjustments) 256,000 Freehold property 200,000 Equipment at cost 680,000 Equipment Accumulated depreciation (1 January 2019) 272,000 Inventories 180,000 Trade receivables 140,000 Trade payables 75,000 Allowance for doubtful debts (1 January 2019) 4,000 Long term investments 130,000 5% Bank Loan, repayable in 2024 100,000 Cash 142,000 Share Capital (1 January 2019) 680,000 Revaluation reserve (1 January 2019) 10,000 Retained profits (1 January 2019) 95,000 Dividend for the year 20,000 1,492,000 1,492,000

Additional information:

a. The allowance for doubtful debts as at 31 December 2019 is RM3,800, after making adjustment for a RM1,500 bad debt written off. b. Depreciation on equipment, at 10% on straight line method, has yet to be made. c. Being a socially responsible company, DeLyod Sdn Bhd decided to provide for a clean-up cost estimated at RM30,000, to clean the operational waste that had leaked into a nearby stream during the year. The clean-up work is targeted to take place in January 2020. d. Rental income is RM2,000 per month. During the year, total rent received was RM22,000. e. A freehold property was revalued during the year, giving rise to a revaluation reserve of RM40,000. No record was made of this revaluation.

Required:

a. Determine the adjusted profit for the year ended 31 December 2019. (Note: Preparation of the statement of profit or loss is not required). (5 marks)

b. Prepare the following statements in a form suitable for publication, in accordance with MFRS 101 Presentation of Financial Statements:

(i) Statement of Changes in Equity for the year ended 31 December 2019. (ii) Statement of Financial Position as at 31 December 2019 (15 marks) (Total: 20 marks)