Required: Prepare the statement of profit or loss and other comprehensive income (by nature) and the...

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Required: Prepare the statement of profit or loss and other comprehensive income (by nature) and the statement of changes in equity for the year ended 31 October 2019 and statement of financial position as at that date for Lofoten Bhd. in accordance with applicable international financial reporting standards. Notes to the financial statements are not required, but all workings should be clearly shown. [Total: 27 marks] Question 2 The following trial balance relates to Lofoten Bhd. (Lofoten), a public listed company as at 31 October 2019: Work performed by the entity and capitalised Bank Interest expenses Equity share capital 3.8% Redeemable preference shares (redeemable on 30 April 2024) Preference shares Inventories as at 31 October 2018 - Raw material - Work-in-progress - Finished goods Long-term borrowings Dividend income Dividend paid Investment property as at 31 October 2018 Deferred tax Accumulated depreciation as at 31 October 2018: - Leasehold property - Plant and equipment Leasehold property Plant and equipment Purchases of raw materials Trade receivables/ Trade payables Wages and salaries Revaluation reserve Debit RM'000 Operating expenses General reserve Revenue Current tax Retained earnings as at 31 October 2018 940 12,400 27,800 35,500 2,580 35,400 420,600 376,900 145,000 35,800 32,400 13,740 1,139,060 Credit RM'000 3,750 4,720 358,100 10,300 94,500 88,200 1,800 480 121,400 35,800 41,550 48,300 34,100 248,700 570 46,790 1,139,060 The following notes are relevant: 1. Lofoten revalued its leasehold property on 1 November 2018 to the market value of RM307.5 million. Lofoten has not recorded the revaluation in its books as at 31 October 2019. The remaining life of the leasehold property was twenty-four years at the date of revaluation. Lofoten makes an annual transfer to retained earnings to reflect the realisation of the revaluation surplus. 2. 3. 4. 5. 6. 7. All the plant and equipment are depreciated at 10% per annum using the reducing balance method. No depreciation/amortization has yet been charged on any non-current assets for the year ended 31 October 2019. Lofoten provides a full year's depreciation in the year of purchase and no depreciation in the year of sale. The following is the cost of closing inventories of Lofoten for the year ended 31 October 2019: Raw materials Work-in-progress Finished goods RM'000 18,400 31,200 28,300 77,900 Lofoten had issued 3.8% redeemable preference shares on 1 May 2019 to raise fund for its capital investment. On 18 April 2019, Lofoten made a fully subscribed rights issue for equity shares capital based on one new shares at RM1.17 each for every four shares held. The issue has been fully recorded in the trial balance. The paid up capital of Lofoten as at 1 November 2018 consisted of 140 million equity shares. During the year ended 31 October 2019, the directors of Lofoten have decided to transfer RM12.5 million from general reserve to retained earnings. The directors of Lofoten proposed a final equity dividend of 3.2 sen per share for the year ended 31 October 2019. Lofoten's income tax calculation for the year ended 31 October 2019 shows a tax provision of RM3.58 million. The balance on current tax in the trial balance represents the under/over provision of the tax liability for the year ended 31 October 2018. Lofoten had taxable temporary differences of RM9.47 million. The income tax rate of Lofoten is 24%. Required: Prepare the statement of profit or loss and other comprehensive income (by nature) and the statement of changes in equity for the year ended 31 October 2019 and statement of financial position as at that date for Lofoten Bhd. in accordance with applicable international financial reporting standards. Notes to the financial statements are not required, but all workings should be clearly shown. [Total: 27 marks] Question 2 The following trial balance relates to Lofoten Bhd. (Lofoten), a public listed company as at 31 October 2019: Work performed by the entity and capitalised Bank Interest expenses Equity share capital 3.8% Redeemable preference shares (redeemable on 30 April 2024) Preference shares Inventories as at 31 October 2018 - Raw material - Work-in-progress - Finished goods Long-term borrowings Dividend income Dividend paid Investment property as at 31 October 2018 Deferred tax Accumulated depreciation as at 31 October 2018: - Leasehold property - Plant and equipment Leasehold property Plant and equipment Purchases of raw materials Trade receivables/ Trade payables Wages and salaries Revaluation reserve Debit RM'000 Operating expenses General reserve Revenue Current tax Retained earnings as at 31 October 2018 940 12,400 27,800 35,500 2,580 35,400 420,600 376,900 145,000 35,800 32,400 13,740 1,139,060 Credit RM'000 3,750 4,720 358,100 10,300 94,500 88,200 1,800 480 121,400 35,800 41,550 48,300 34,100 248,700 570 46,790 1,139,060 The following notes are relevant: 1. Lofoten revalued its leasehold property on 1 November 2018 to the market value of RM307.5 million. Lofoten has not recorded the revaluation in its books as at 31 October 2019. The remaining life of the leasehold property was twenty-four years at the date of revaluation. Lofoten makes an annual transfer to retained earnings to reflect the realisation of the revaluation surplus. 2. 3. 4. 5. 6. 7. All the plant and equipment are depreciated at 10% per annum using the reducing balance method. No depreciation/amortization has yet been charged on any non-current assets for the year ended 31 October 2019. Lofoten provides a full year's depreciation in the year of purchase and no depreciation in the year of sale. The following is the cost of closing inventories of Lofoten for the year ended 31 October 2019: Raw materials Work-in-progress Finished goods RM'000 18,400 31,200 28,300 77,900 Lofoten had issued 3.8% redeemable preference shares on 1 May 2019 to raise fund for its capital investment. On 18 April 2019, Lofoten made a fully subscribed rights issue for equity shares capital based on one new shares at RM1.17 each for every four shares held. The issue has been fully recorded in the trial balance. The paid up capital of Lofoten as at 1 November 2018 consisted of 140 million equity shares. During the year ended 31 October 2019, the directors of Lofoten have decided to transfer RM12.5 million from general reserve to retained earnings. The directors of Lofoten proposed a final equity dividend of 3.2 sen per share for the year ended 31 October 2019. Lofoten's income tax calculation for the year ended 31 October 2019 shows a tax provision of RM3.58 million. The balance on current tax in the trial balance represents the under/over provision of the tax liability for the year ended 31 October 2018. Lofoten had taxable temporary differences of RM9.47 million. The income tax rate of Lofoten is 24%.

Answer rating: 100% (QA)

Statement of Profit or Loss and Other Comprehensive Income by nature for the year ended 31 October 2... View the full answer