Emper Bhd operates a funded defined benefit plan for its employees. As at 1 November 2019, the
Question:
Emper Bhd operates a funded defined benefit plan for its employees. As at 1 November 2019, the present value of the defined benefit obligation and the fair value of the plan assets were RM60,500,000 and RM58,200,000 respectively. For the year ended 30 October 2020 the following information is given:
i. The discount rate that reflected yields of high-quality corporate bonds was 10%.
ii. Based on actuarial valuation, the current service cost was RM5,200,000.
iii. Cost for improving existing plan amounting to RM3,500,000.
iv. Contributions paid to the fund for the year totaled RM3,600,000.
v. Benefits paid to retired employees were RM6,000,000.
vi. The expected return on plan assets for the year was 12%.
As at 30 October 2020, the present value of the defined benefit obligation was RM65,640,000 and the fair value of the plan assets on this date was RM63,680,000.
In November 2019, Emper Bhd acquired an equipment valued at RM300,000. The terms of the agreement allow the company to pay for the equipment either in terms of cash equivalent to the market value of 160,000 ordinary shares on 1 February 2020 or by the issue of 200,000 ordinary shares at market value on 1 March 2020. The equipment was received by the company on 1 January 2020. The market value of the company’s ordinary shares for the month of January and February 2020 were RM2.50 and RM2.80 respectively.
In previous years, when the company acquired property, plant and equipment under similar terms and conditions as the above, it settled the acquisition by cash. This transaction has yet to be recorded by the company. Depreciation of the equipment is 5% on cost, yearly basis. For taxation purposes, the equipment is entitled to a 10% initial allowance and a 5% annual allowance.
On 1 August 2020, Emper Bhd made a right issue of two (2) new ordinary shares for every ten (10) ordinary shares held at a price of RM3.00 per share. Market value of the ordinary shares before the rights issue was RM4.20. This transaction has yet to be recorded by the company.
12,000,000 5% preference shares of RM 1 each were issued on 1 September 2020.
As at 31 October 2020, taxable temporary differences and deductible temporary differences for all assets and liabilities in the statement of financial position (before adjustments) were RM8,000,000 and RM3,800,000 respectively.
The current and future tax is estimated to remain at 25%
Required:
Prepare the following financial statements in a form suitable for publication:
Statement of profit or loss and other comprehensive income for the year 31 October 2020.
(determine the basic earnings per share)
b) Statement of changes in equity for the year ended 31 October 2020.
c) Statement of financial position as at 31 October 2020.
Show all necessary workings.
Expert Answer:
Quiz a Emper Bhd Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 Oc... View the full answer
