Question 6 Harry Bhd, a public listed company based in Klang Valley, manufactures a wide variety of cooking utensils for household use. The following is the trial balance of Harry Bhd as at 31 December 2020: Debit Credit RM'000 RM'000 Sales revenue 60,100 Investment income 1,400 Cost of sales 25,112 Administrative expenses 5,600 Selling and distribution expenses 8,680 Ordinary dividends paid 1,420 Interest paid [Note iv] 2,400 Ordinary share capital 10,380 Retained eamings (1 January 2020) 15,980 Accounts payable 4,308 Allowance for doubtful debts 512 Bank Accounts receivable 23,200 Inventory (31 December 2020) 17,768 Property, plant and equipment (carrying value at 1 36,800 January 2020) [Note ij Investment property (1 January 2020) [Note ii] 12,000 6% Loan note [Note iv] 40,000 Deferred taxation (at 1 January 2020) [Note v] 6,300 Income tax paid 900 Total 139,880 139,880 6.900 (I) The following notes are relevant: (0) Included within property, plant and equipment is a building with a carrying value of RM4.5 million. On 1 January 2020, it was revalued at RM6 million. The building had an estimated life of 25 years when it was purchased 10 years prior to the revaluation date. This has not changed as a result of the revaluation. The building is to be depreciated using straight line method. The directors of Harry Bhd wish to incorporate this value in the financial statements for the year ended 31 December 2020. All other property, plant and equipment are to be depreciated at 20% per annum on the reducing balance basis. All depreciation is to be charged to administrative expenses. (iii) The investment property owned by Harry Bhd has risen in value during the year by 3%. This rise is to be incorporated into the financial statements. Harry Bhd uses the fair value model to value investment property. (iv) On 1 January 2020, Harry Bhd issued a loan note at a fixed annual interest rate of 6%. The principle sum of RM40 million is repayable in 5 years' time and interest is payable annually in arrears. The loan note was issued at a discount of RM1 million and the issue costs on the loan was RM250,000. The effective annual interest rate on this loan is approximately 9.5%. The first year's interest paid of RM2.4 million is shown as finance costs in the draft accounts. (v) The provision for income tax for the year ended 31 December 2020 has been estimated at RM11.7 million. For the deferred tax provision, the only taxable temporary difference is accelerated capital allowances and as at 31 December 2020, these were RM10.8 million. Income tax is charged at 25%. Required: In accordance with the relevant Malaysian Financial Reporting Standards, prepare the following financial statements for the year ended 31 December 2020 for Harry Bhd: (a) Statement of Profit or Loss and Other Comprehensive Income, and [14 marks] (b) Statement of Financial Position. [16 marks]