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)