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Question 3 The trial balance of Mercury Bhd at 30 June 2021 was as follows: Dr CE RM000 RM000 7% Redeemable preferred shares 500 (RMI
Question 3 The trial balance of Mercury Bhd at 30 June 2021 was as follows: Dr CE RM000 RM000 7% Redeemable preferred shares 500 (RMI per unit) Ordinary shares (RMO 50 per unit) 250 share premium 180 retained earnings (17/2020) 70 Inventory (1/7/2020) 450 Land at cost 300 900 135 1,020 370 900 600 25 Buildings at cost Accumulated depreciation - Buildings Plant at cost Accumulated depreciation - Plant Trade payables Trade receivables Allowance for doubtful debts- 1/7/2020 Purchases Administrative expense Sales revenue Distribution costs Other expenses Bank balance Ordinary dividend paid 10% loan notes 2.030 205 3,000 240 50 110 25 500 5930 5930 2. 4. You are provided with the following additional information: 1 Depreciation on buildings is to be provided at 5% per year on cost and allocated to administrative expense. Plant is to be depreciated a 20% per year using the reducing balance method and included in distribution costs 3. Closing inventory is valued at RM500,000 The allowance for doubtful debts is to be maintained at 5% of trade accounts receivable balances 5. An accrual for distribution wages of RM30,000 is required 6. Interest on the loan notes has not been paid during the year 7. During June, a bonus issue of two for five was made to ordinary shareholders. Share premium account is used for this purpose. However, this has not been entered Provisions are to be made for the following: The preferred dividend for the year An income tax charge of RM55.000 for the year. Required: Prepare for Mercury Bhd for the year ended 30 June 2021 (a) A statement of comprehensive income (8 marks) 8 (b) A statement of changes in equity, and (7 marks) () A statement of financial position (10 marks) [Total: 25 Marks)
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