SHJ Bhd has traded at a loss in recent years and no dividends have been paid to the shareholders. The company has provided the following information: Statement of Financial Position for the year ended 31 December 2019 RM RM Non-Current Assets Land and building Plant and equipment Motor vehicles Goodwill Investments 155,000 510,000 50,000 60,000 130,000 905,000 Current Assets Inventories Trade and other receivables Total Assets 240,000 420,000 660,000 1,565,000 BE Equity and Reserves Ordinary shares of RM1 each Retained earnings 1,200,000 (420,000) 780,000 Current Liabilities Trade and other payables Cash and cash equivalent Total Equity and Liabilities 635,000 150,000 785,000 1,565,000 The impairment review on 31 December 2019 showed the following: 1. Land and buildings were overvalued by RM50,000. 2. Additional depreciation of RM80,000 is required on plant and equipment. 3. Goodwill should be written down by RM40,000. 4. The carrying value of the investment should be RM110,000. 5. Inventory valued at RM70,000 is obsolete and has no value. 6. Trade receivables include a bad debt of RM40,000. The directors are confident the company is now trading at a profit. They proposed the following scheme of reconstruction and capital reduction to the shareholders: The adjustments to the carrying values of the company's assets to be made to take account of the impairment review. The balance on retained earnings is to be written off. Each shareholder receives one new ordinary share with a reduced nominal value for every RM1 ordinary share presently held. Required: a. Calculate the reduction in total ordinary share capital of SHJ Bhd when the scheme of reconstruction is implemented. (10 marks) b. Prepare the company's Statement of Financial Position on 1 January 2020 immediately after implementing the scheme of reconstruction. (10 marks)