Question 2 (50 marks)

Sejahtera Bhd has an authorized share capital of RM2,000,000 divided into 3,000,000 equity shares of 50cents and 500,000 12% redeemable preference shares of RM1.

The following trial balance has been extracted from accounting records at 30 June 2020.

	Debit RM000	Credit RM000
50cents equity shares (paid)		500
12% RM1 preference shares (paid)		200
8% debentures		400
Retained earnings 1 July 2019		368
Freehold land and buildings (cost)	860
Plant and machinery (cost)	1,460
Motor vehicle (cost)	440
Accumulated depreciation at 1 July 2019
Freehold buildings		40
Plant and machinery		444
Motor vehicles		230
Inventory at 1 July 2019	380
Sales		6,590
Purchases	4,304
Final dividends for year end 30 June 2019:
Equity	40
Interim dividends for the year end 30 June 2020
Preference	12
Equity	16
Debenture interest	16
Wages and salaries	508
Light and heat	62
Irrecoverable debt expense	30
Other administration expenses	196
Receivables	578
Payables		390
Allowance for receivables		20
Corporation tax paid	112
Bank	168
	RM9,182	RM9,182

The following information needs to be dealt with before the financial statements can be completed:

1. Inventories at 30 June 2020 were valued at cost RM440,000

2. Other administration expenses include RM18,000 paid in respect of a machinery maintenance contract for the 12 months ending 30 November 2020. Light and heat does not include an invoice of RM12,000 for electricity for the quarter ending 3 July 2020, which was paid in August 2020.

3. The directors wish to provide for:

1. any debenture interest due
2. directors; bonuses of RM24,000
3. the years depreciation

4. The allowance for receivables required at 30 June 2020 is RM24,000

5. During the year ended 30 June 2020, a customer whose receivables balance of RM8,000 had been written off in previous years as irrecoverable paid the full amount owing. The company credited this amount to receivables

6. The debentures have been in issue for some years

7. Corporation tax of RM256,000 is to be charged on the profits

8. During the year a piece of machinery, which had originally cost RM320,000 and had been owned by the company for 6 years, was scrapped. Proceeds received were RM40,000. These have been incorrectly credited to the plant and machinery cost account.

9. The buildings element of the freehold land and buildings cost is RM400,000.

Depreciation methods and rates are as follows:

Building Straight-line over 50 years

Plant and machinery 10% straight-line

Motor vehicle 33% reducing balance

Required:

Prepare the financial statements for Sejahtera Bhd for the year ended 30 June 2020 according to the Principles set out under IAS 1. Your statements should include:

1. Statement of Comprehensive income for the year ended
2. Statements of Financial Position for the year ended
3. Statement of changes in equity for the year ended
4. Note to financial Statement:

1. Property, Plant and Equipment
2. Revaluation of non-current assets
3. Expense by functions
4. Receivables and Payables
5. Finance Cost