Question
TRITECH BERHAD Statement of Financial Position as at 31 January 2022 (RM' Million) Assets Non-current Land 1,950 Office Building 1,700 Factories 550 Machines 250 Equipment
TRITECH BERHAD
Statement of Financial Position as at 31 January 2022 (RM' Million)
Assets
Non-current Land 1,950
Office Building 1,700
Factories 550
Machines 250
Equipment 200
Investment in financial asset through reserve 200
Investment in bonds 100
Patents 360
Net deferred tax assets 220
TOTAL 5,530
Current
Inventories 300
Trade receivables 150
Prepayment 2
Marketable securities 8
Bank 10
Total assets 6,000
Liabilities
Non-current Bank loans 300
12% Debentures 80
Current Trade payables 80
Accrued expense 60
Total liabilities 520
Equities Contributed ordinary share capital 12,000
4% Contributed cumulative preference share capital 1,000
Fair value reserve 50
Revaluation reserve 450
Accumulated loss -8,020
Total equities 5,480
Tritech has carried out capital reduction scheme which was duly approved by the court.
Additional info: i. Tritech Berhad has in issue following units of shares:
Ordinary shares 1,000 Preference shares 200
(i) Based on independent valuers assessment, Tritech obtained following values for the respective items:
Items Fair value less cost to sell (RM' Million) Value in use (RM' Million) Land 1,650 2,200
Office Building 1,600 2,000
Factories 640 800
Machines 200 200
Equipment 160 180
Items Market value/Net realisable value/Net written off (RM' Million) Investment in financial asset through reserve 250
Investment in bonds 110
Patents 280
Marketable securities 12
Trade receivables 100
Inventories 150
ii. Ordinary shares price per share is to be reduced by 60%.
iii. Preference shares price per share is to be reduced by 80%.
iv. Accumulated losses and net deferred tax assets are to be written off.
v. There are arrears of RM40 million for preference shares dividends. For the settlement of the arrears, the preference shareholders have agreed to receive 1 ordinary shares at 40% of the initial book value price (i.e. price before capital reduction scheme) of the ordinary shares, for every RM10 arrears.
vi. Tritech has not accounted RM0.598 million contingent liability. The contingent liability materialised and Tritech is obligated to pay 25% of the estimated amount.
vii. Existing ordinary shareholders have agreed to subscribe 3 ordinary shares for every 4 ordinary shares they held at 40% of the initial book value price (i.e. price before capital reduction scheme) of the ordinary shares.
viii. Half of the bank loans and 10% debentures amounts, respectively, are to be settled with the sale of some land at 140% of the lands recoverable amount value.
ix. The reorganisation expenses incurred are RM1.85 million. x. Marketable securities which have been recorded at market value of RM6 million were sold for RM 8 million.
xi. Investment in financial assets through reserve which have been recorded at market value of RM55 million were sold for RM68.2 million.
xii. Investment in bonds which have been recorded at market value of RM26 million were sold for RM30 million.
xiii. Inventories which have been recorded at net realisable value of RM20 million were sold for RM14 million.
xiv. Debtors paid 80% of the trade receivables written off amount.
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