Gazel Tech Bhd is a manufacturing company specialising in computer department of the company is preparing...

  

      

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Gazel Tech Bhd is a manufacturing company specialising in computer department of the company is preparing the financial statements for the year ended 31 December 2018 which will be authorised for issue on 31 March 2019. The trial and technical services. The accounting balance of the company based on the unadjusted account balances is shown below: Gazel Tech Bhd Trial balance as at 31 December 2018 Debit Credit RM RM 13,494,00O Revenue Cost of sales 6,500.000 1.111,500 2,074,800 Distribution costs Administrative costs Investment income Allowance for impairment of trade receivables Accumulated depreciation of plant and equipment as at 1 January 2018 Accumulated depreciation of building as at 1 January 2018 Accounts payable Ordinary shares Retained earnings, 1 January 2018 6% Loan from MMB Bank (taken on 30 June 2018) Tax paid 390,000 180,700 3,640.00O 325,000 1,833.00O 10,400.000 2,243,80O 650.000 910.000 2,444.000 1,300.000 3.104,40O 9.100,000 1.716.00O 884.000 1,873,300 819,000 1,306,50O 13.000 33.156,50o 33,156,50O Inventories, 31 December 2018 Building Freehold land Plant and equipment Investment property Patents Accounts receivable Long term investment Cash & bank balances Interests on loan from MMB Bank Additional information: 1. Information relating to the company's non-current assets during the year is as follows: On 31 December 2018, the freehold land was revalued to RM3,510,000. ii. A land was acquired on 1 April 2018 for undetermined future used for RM715,000. The fair value of the land as at 31 December 2018 was RM845,000. i. A motor vehicle was acquired on 1 March 2018 for RM390,000. iv. Gazel Tech Bhd bought a high-tech equipment from a United Stated company on 1 July 2018 for USD 156,000 and paid for it on 30 September 2018. The related exchange rates were as follows: USD 1=RM 3.20 1 July 2018 30 September 2018 USD 1 RM 3.50 31 December 2018 JUSD 1=RM 3.40 No entries have been made for the acquisition of the above equipment. 2. Gazel Tech Bhd depreciates its non-current assets as follows: Building Plant & Machinery 10% on cost Motor vehicle 10 years, Straight line 40 years, Straight line Depreciation expenses are charged to administrative expenses and on monthly basis. The depreciation charges for the year ended 31 December 2018 have not been made. The investment properties are measured on the fair value model. 3. Information relating to the company's intangible assets is as follows: A copyright was acquired at an initial cost of RM380,000 on 1 July 2018 and is to be amortised over a period of 10 years. i. The patent has an indefinite useful life. i It is the policy of the company to adopt cost model on the subsequent measurement of its intangible i. asset. 4. Gazel Tech Bhd sells computers that include a warranty to make repair or replace any defect in its computers for 120 days. Based on experience, it is probable that there will be some claims under the warranties. Gazel Tech Bhd estimates that such returns usually amount to RM5,200 annually. During the year ended 31 December 2018 a lawsuit as per mentioned by the company's lawyer involved a staff who has sued the company amounting to RM650,000 for failure to provide a safe working environment causing him to lose his right hand. The company's lawyer stated that the company will be held liable. 5. On 1 February 2019, the company entered into a contract with Super Bhd to purchase of building located at Kota Kinabalu area for RM10,000,000. During the year, an employee of the company who has been dismissed for improper conduct has sued the company for unfair dismissal. The company's lawyer is of the opinion that it is unlikely that the employee will win the case. 6. 7. 8. One of the Gazel Tech Bhd's customer who owed the company RM11,700 was declared bankrupt on 1 January 2019. None of the amount is expected to be recovered. 8. One of the Gazel Tech Bhd's customer who owed the company RM11,700 was declared bankrupt on 1 January 2019. None of the amount is expected to be recovered. 9. While preparing the final account for 31 December 2018, the accounts clerk discovered that an amount of RM130,000 payment for credit purchases for year ended 2015 has been wrongly accounted as interest on loan. 10. The revenue figure above excludes a credit sale amounting RM78,000 (cost December 2018 but the delivery was delayed until early January 2019 due to special request from a customer as he is still renovating its building. RM39,000) on 1 On 1 January 2018, Gazel Tech Bhd signed a contract with a customer to sell a computer as well as a 12-month technical support for RM840,000. Gazel Tech Bhd delivered 100 units computers and transferred its legal title to the customer on 30 January 2018. The customer paid the full amount on the same date. The standalone price of the computer and the technical support for each computer are RM8,000 and RM1,000 respectively. This entry has been omitted from the business books for the year ended 31 December 2018. 11. 12. The following information also available as at the financial year end: The tax expense for the year is estimated to be RM650,000. ii. The net realisable value of the closing inventory was RM2,340,000. iii. The interest on loan for November and December 2018 still owing. i. Required: Prepare the following statements for the company in compliance with the Companies Act 2016 (amended) and the relevant financial reporting standards: a. Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2018; b. Statement of Financial Position as at 31 December 2018; c. Statement of Changes in Equity for the year ended 31 December 2018; d. The Notes to the Financial Statements for property, plant and equipment and non-adjusting event after reporting period (if any). Gazel Tech Bhd is a manufacturing company specialising in computer department of the company is preparing the financial statements for the year ended 31 December 2018 which will be authorised for issue on 31 March 2019. The trial and technical services. The accounting balance of the company based on the unadjusted account balances is shown below: Gazel Tech Bhd Trial balance as at 31 December 2018 Debit Credit RM RM 13,494,00O Revenue Cost of sales 6,500.000 1.111,500 2,074,800 Distribution costs Administrative costs Investment income Allowance for impairment of trade receivables Accumulated depreciation of plant and equipment as at 1 January 2018 Accumulated depreciation of building as at 1 January 2018 Accounts payable Ordinary shares Retained earnings, 1 January 2018 6% Loan from MMB Bank (taken on 30 June 2018) Tax paid 390,000 180,700 3,640.00O 325,000 1,833.00O 10,400.000 2,243,80O 650.000 910.000 2,444.000 1,300.000 3.104,40O 9.100,000 1.716.00O 884.000 1,873,300 819,000 1,306,50O 13.000 33.156,50o 33,156,50O Inventories, 31 December 2018 Building Freehold land Plant and equipment Investment property Patents Accounts receivable Long term investment Cash & bank balances Interests on loan from MMB Bank Additional information: 1. Information relating to the company's non-current assets during the year is as follows: On 31 December 2018, the freehold land was revalued to RM3,510,000. ii. A land was acquired on 1 April 2018 for undetermined future used for RM715,000. The fair value of the land as at 31 December 2018 was RM845,000. i. A motor vehicle was acquired on 1 March 2018 for RM390,000. iv. Gazel Tech Bhd bought a high-tech equipment from a United Stated company on 1 July 2018 for USD 156,000 and paid for it on 30 September 2018. The related exchange rates were as follows: USD 1=RM 3.20 1 July 2018 30 September 2018 USD 1 RM 3.50 31 December 2018 JUSD 1=RM 3.40 No entries have been made for the acquisition of the above equipment. 2. Gazel Tech Bhd depreciates its non-current assets as follows: Building Plant & Machinery 10% on cost Motor vehicle 10 years, Straight line 40 years, Straight line Depreciation expenses are charged to administrative expenses and on monthly basis. The depreciation charges for the year ended 31 December 2018 have not been made. The investment properties are measured on the fair value model. 3. Information relating to the company's intangible assets is as follows: A copyright was acquired at an initial cost of RM380,000 on 1 July 2018 and is to be amortised over a period of 10 years. i. The patent has an indefinite useful life. i It is the policy of the company to adopt cost model on the subsequent measurement of its intangible i. asset. 4. Gazel Tech Bhd sells computers that include a warranty to make repair or replace any defect in its computers for 120 days. Based on experience, it is probable that there will be some claims under the warranties. Gazel Tech Bhd estimates that such returns usually amount to RM5,200 annually. During the year ended 31 December 2018 a lawsuit as per mentioned by the company's lawyer involved a staff who has sued the company amounting to RM650,000 for failure to provide a safe working environment causing him to lose his right hand. The company's lawyer stated that the company will be held liable. 5. On 1 February 2019, the company entered into a contract with Super Bhd to purchase of building located at Kota Kinabalu area for RM10,000,000. During the year, an employee of the company who has been dismissed for improper conduct has sued the company for unfair dismissal. The company's lawyer is of the opinion that it is unlikely that the employee will win the case. 6. 7. 8. One of the Gazel Tech Bhd's customer who owed the company RM11,700 was declared bankrupt on 1 January 2019. None of the amount is expected to be recovered. 8. One of the Gazel Tech Bhd's customer who owed the company RM11,700 was declared bankrupt on 1 January 2019. None of the amount is expected to be recovered. 9. While preparing the final account for 31 December 2018, the accounts clerk discovered that an amount of RM130,000 payment for credit purchases for year ended 2015 has been wrongly accounted as interest on loan. 10. The revenue figure above excludes a credit sale amounting RM78,000 (cost December 2018 but the delivery was delayed until early January 2019 due to special request from a customer as he is still renovating its building. RM39,000) on 1 On 1 January 2018, Gazel Tech Bhd signed a contract with a customer to sell a computer as well as a 12-month technical support for RM840,000. Gazel Tech Bhd delivered 100 units computers and transferred its legal title to the customer on 30 January 2018. The customer paid the full amount on the same date. The standalone price of the computer and the technical support for each computer are RM8,000 and RM1,000 respectively. This entry has been omitted from the business books for the year ended 31 December 2018. 11. 12. The following information also available as at the financial year end: The tax expense for the year is estimated to be RM650,000. ii. The net realisable value of the closing inventory was RM2,340,000. iii. The interest on loan for November and December 2018 still owing. i. Required: Prepare the following statements for the company in compliance with the Companies Act 2016 (amended) and the relevant financial reporting standards: a. Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2018; b. Statement of Financial Position as at 31 December 2018; c. Statement of Changes in Equity for the year ended 31 December 2018; d. The Notes to the Financial Statements for property, plant and equipment and non-adjusting event after reporting period (if any).

Answer rating: 100% (QA)

SOLUTION A STATEMENT OF PROFIT LOSS ACCOUNT REVENUE 14326222 LESS COST OF SALES INCLUDING IMPAIRMENT ON INVENTORIES WARRANTIES EXPENSE 6609200 GROSS PROFIT 7717022 DISTRIBUTION COSTS 1111500 ADMINISTR... View the full answer