Q1. The following trial balance was extracted from the books of Lexis Bhd as at 31...

  

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Q1. The following trial balance was extracted from the books of Lexis Bhd as at 31 December 2020. Sales and Purchases Dividend income from investment Inventory at 1 January 2020 Wages and salaries Electricity expenses Carriage inwards Investment in James Bhd Insurance expense Interim - Preference dividend Interim - Ordinary dividend Selling and distribution expenses Administration expenses Directors remunerations Retained profit as at 1 January 2020 Allowance for doubtful debts 20% debentures, payable in 10 years Discount allowed and received 7% Preference share capital at RM1.50 per share Ordinary share capital at RM1.50 per share Asset revaluation reserve General reserve Bank overdraft Building at cost Office equipment at cost Freehold land at cost Accumulated depreciation - Building Accumulated depreciation - Office equipment Trade receivables and payables Debenture interest Tax paid RM 2,046,000 902,000 732,000 45,000 38,000 340,000 100,000 7,980 500,000 81,000 89,000 210,000 55,000 990,000 330,000 774,000 334,000 50,000 35,000 7,658,980 RM 4,592,375 44,000 220,000 3,000 500,000 38,955 300,000 750,000 75,000 150,000 23,000 375,650 195,000 392,000 7,658,980 Additional information: The cost of the inventory as at 31 December 2020 was RM990,000 and the net realisable value was RM942,000. (1) (2) (3) (4) (5) (6) (8) (b) Office equipment are to be depreciated at a rate of 17% per annum on reducing balance method. Meanwhile building is to be depreciated at a rate of 25% per annum on cost. (c) A customer owing RM30,000 has gone into liquidation and this amount is to be written off immediately. While the allowance for doubtful debts was then to be adjusted to 2% of the outstanding trade receivables account as at 31 December 2020. Provision are to be made for prepaid insurance expenses amounted to RM25,600, accrued electricity expenses amounted to RM17,560 and for auditor's remunerations of RM45,250. There is a proposed of final dividend for ordinary shares at RM0.15 per share. The second half debenture interest and the preference share dividends are to be provided for. The tax expense charged for the year ended 2020 should be RM31,200. Corporate tax at 24%. The directors have decided to increase the general reserves by a further RM80,500. Required: (a) The company was registered with an authorized capital consisting of 1,000,000 ordinary shares of RM1.50 each and 500,000 7% preferences shares of RM1.50 each. Prepare the Statement of Comprehensive Income for the year ended 31 December 2020. (Note: Ignore GST effect). (22 marks) Prepare the Statement of Financial Position as at 31 December 2020. (Note: Ignore GST effect). (20 marks) Explain ANY FOUR (4) inherent limitations of auditing. (8 marks) [Total: 50 marks] Q1. The following trial balance was extracted from the books of Lexis Bhd as at 31 December 2020. Sales and Purchases Dividend income from investment Inventory at 1 January 2020 Wages and salaries Electricity expenses Carriage inwards Investment in James Bhd Insurance expense Interim - Preference dividend Interim - Ordinary dividend Selling and distribution expenses Administration expenses Directors remunerations Retained profit as at 1 January 2020 Allowance for doubtful debts 20% debentures, payable in 10 years Discount allowed and received 7% Preference share capital at RM1.50 per share Ordinary share capital at RM1.50 per share Asset revaluation reserve General reserve Bank overdraft Building at cost Office equipment at cost Freehold land at cost Accumulated depreciation - Building Accumulated depreciation - Office equipment Trade receivables and payables Debenture interest Tax paid RM 2,046,000 902,000 732,000 45,000 38,000 340,000 100,000 7,980 500,000 81,000 89,000 210,000 55,000 990,000 330,000 774,000 334,000 50,000 35,000 7,658,980 RM 4,592,375 44,000 220,000 3,000 500,000 38,955 300,000 750,000 75,000 150,000 23,000 375,650 195,000 392,000 7,658,980 Additional information: The cost of the inventory as at 31 December 2020 was RM990,000 and the net realisable value was RM942,000. (1) (2) (3) (4) (5) (6) (8) (b) Office equipment are to be depreciated at a rate of 17% per annum on reducing balance method. Meanwhile building is to be depreciated at a rate of 25% per annum on cost. (c) A customer owing RM30,000 has gone into liquidation and this amount is to be written off immediately. While the allowance for doubtful debts was then to be adjusted to 2% of the outstanding trade receivables account as at 31 December 2020. Provision are to be made for prepaid insurance expenses amounted to RM25,600, accrued electricity expenses amounted to RM17,560 and for auditor's remunerations of RM45,250. There is a proposed of final dividend for ordinary shares at RM0.15 per share. The second half debenture interest and the preference share dividends are to be provided for. The tax expense charged for the year ended 2020 should be RM31,200. Corporate tax at 24%. The directors have decided to increase the general reserves by a further RM80,500. Required: (a) The company was registered with an authorized capital consisting of 1,000,000 ordinary shares of RM1.50 each and 500,000 7% preferences shares of RM1.50 each. Prepare the Statement of Comprehensive Income for the year ended 31 December 2020. (Note: Ignore GST effect). (22 marks) Prepare the Statement of Financial Position as at 31 December 2020. (Note: Ignore GST effect). (20 marks) Explain ANY FOUR (4) inherent limitations of auditing. (8 marks) [Total: 50 marks]

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a Income Statement For the Year Ended December 31 2020 Revenue Sales 902000 Dividend income from investment 44000 Total revenue 946000 Expenses Cost o... View the full answer