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 of 31 December 2020:

	Debit	Credit
	'000	'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 earnings (1/1/2020)		15,980
Account payable		4,308
Allowance for doubtful debts		512
Bank	6,900
Account receivable	23,200
Inventory (31/12/20)	17,768
Property, plant, and equipment (carrying value at 01/01/20)(Note i)	36,800
Investment property (01/01/20) (Note iii)	12,000
6% Loan note (Note iv)		40,000
Deferred taxation (at 01/01/20) (Note v)		6,300
Income Tax paid		900
Total	139,880	139,880

The following notes are relevant:

(i) Included within property, plant, and equipment is a building with a carrying value of $4.5 million. On 1 January 2020, it was revalued at $6 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 the straight-line method. The directors of Harry Bhd wish to incorporate this value in the financial statements for the year ended 31 December 2020.

(ii) All other property, plant, and equipment are to be depreciated at 20% per annum on a 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 principal sum of $40 million is repayable in 5 years' time and interest is payable annually in arrears. The loan note was issued at a discount of $1 million and the issue costs on the loan were $250,000. The effective annual interest paid of $2.4 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 $11.7 million. For the deferred tax provision, the only taxable temporary difference is accelerated capital allowances and as of 31 December 2020, these were $10.8 million. Income tax is charged at 25%

Required:

In accordance with the relevant MFRS, 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

(b) Statement of Finance Position

Answer rating: 100% (QA)

Profit and Loss and Other Compehensive Income Particulars Cost of Sales Selling a... View the full answer