Question

Emerging Berhad, a public company, closes its accounts on December 31 every year. The company reported the following unadjusted trial balance on December 31, 2016:

	Debit		Credit
	RM		RM
Intangible asset	32,000
Property, plant and equipment (at book value)	572,000
Long term investment	140,000
Inventories	53,700
Trade receivable	44,800
Cash	126,200
6% bank loan			45,000
Trade payable			46,000
Sales revenue			827,800
Cost of sales	500,900
Administrative expenses	124,100
Distribution expenses	36,900
Income tax expense	9,600
Prepaid insurance	3,000
Income from investment			21,000
Ordinary share capital			500,000
Retained earnings			322,400
Revaluation reserve			46,000
Dividend	165,000
	1,808,200		1,808,200

The followings are yet to be adjusted as at year end, 31 December 2016:

1. The bank loan was taken on 1 September 2016 and will be repaid on 30 April 2018. No interest has been accrued (recorded) at year end. Use the finance cost a/c to record the interest expense and the interest payable a/c to accrue the interest.
2. The prepaid insurance was paid on 8 July 2016, for 12 months beginning July 2016. Insurance is part of administrative expense.
3. The company sold goods on credit at invoice RM13,700 to a customer on 31 December 2016. The sales transaction has not been recorded.
4. Included in the property, plant and equipment is a piece of freehold land that was bought in 2014 at a cost of RM350,000. The company decided to revalue the freehold land in line with the recent increases in market value. In December 2016, an independent surveyor valued the freehold land at RM420,000.
5. It is the companys policy to depreciate its remaining property, plant and equipment at 10% on cost. Depreciation expense is classified as administrative expense.

Required:

1. Journalize the above transactions or show workings.

(5 marks)

2. Prepare statement of profit or loss and other comprehensive income and statement of changes in equity for the year ended 31 December 2016, and statement of financial position as at 31 December 2016.

(15 marks)