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 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 The prepaid insurance was paid on 8 July 2016, for 12 months beginning July 2016 Insurance is part of administrative expense The company sold goods on credit at invoice RM13,700 to a customer on 31 December 2016 The sales transaction has not been recorded 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 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 Journalize the above transactions or show workings (5 marks) 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)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 31, 2024

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,

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:

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.
The prepaid insurance was paid on 8 July 2016, for 12 months beginning July 2016. Insurance is part of administrative expense.
The company sold goods on credit at invoice RM13,700 to a customer on 31 December 2016. The sales transaction has not been recorded.
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.
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:

Journalize the above transactions or show workings.

(5 marks)

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)