ABC company wholesales and distributes fashionable clothes, and provides distribution services to other companies. The following balances
Question:
ABC company wholesales and distributes fashionable clothes, and provides distribution services to other companies. The following balances have been extracted from ABC company books of account as at 31 December 2019:
Additional information:
1- Included in revenue are invoices totalling RM120,000 in relation to distribution services rendered under a contract to a customer. The contract price was RM100,000 and provides for a RM20,000 bonus for early completion. The contract is currently 65% complete and management of ABC company believe that there is a 55% chance of early completion.
2- The patent was acquired during the year. Amortisation of RM20,000 should be charged to administrative expenses.
3- Inventories at 31 December 2019 were valued at RM1,304,000.
4- Costs not specifically attributable to one of the profit or loss expense items should be split 50:50 between distribution costs and administrative expenses.
5- Inventories carried at RM846,000 were purchased from Hong Kong in Hong Kong Dollar and payment is due on 2 March 2020. At the date of the transaction, the exchange rate was HK$1.55 to RM1.00. At 31 December 2019, the exchange rate was HK$1.50 to RM1.00.
6- A final ordinary share dividend for 2019 of RM50,000 was proposed in May 2020, payable on 28 June 2020.
7-RM450,000 cash was received during the year, as a result of a rights issue of ordinary shares. The nominal value of the shares issued was RM100,000.
8- On 1 June 2019, ABC company decided to sell its 2019 loss-making baby clothes division, as a result of severe competition from other companies in the market. ABC company is confident that the closure process will be completed by 30 April 2020. The division's operations represent in 2019, 10% of revenue (after all adjustments), 15% of cost of sales, 10% of distribution costs and 20% of administrative expenses. No disclosures are necessary in the statement of financial position.
Required:
Based on the above information, prepare the following financial statements for ABC company:
1-statement of financial position as at 31 December 2019.?
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott