The following balances have been extracted from the nominal ledger of Allie

Berhad at 31 March 2023.

Notes RM

Revenue (1), (2) 4,928,000

Purchases 1,896,000

Administrative expenses 1,405,330

Land and buildings (3)

Cost (land RM560,000) 1,960,000

Accumulated depreciation at 31 March 2022 705,600

Plant and machinery (3)

Cost 1,086,000

Accumulated depreciation at 31 March 2022 226,250

Retained earnings at 31 March 2022 140,280

5% irredeemable preference share capital (4) 140,000

Ordinary share capital 460,000

Cash at bank 82,600

Inventories at 31 March 2022 108,000

Trade and other receivables 94,000

Trade and other payables 113,800

Finance costs (2), (4) 82,000

Outstanding issues:

1. From January 2023, customers were able to order a new product called PT01. A RM200 deposit was payable on each order and 80 orders had been placed by customers prior to 31 March 2023. Deliveries to customers commenced in May 2023. The cash deposits were debited to cash at bank and credited to revenue.

2. On 1 April 2022,Allie Berhad entered into a sale and leaseback agreement for one of its existing machines. Under the terms of the agreement, legal title of the machine was transferred to a financial institution in return for a payment of RM520,000, which is equivalent to the machine’s fair value at that date. The transfer of the machine constituted a sale in accordance with IFRS 15 Revenue from Contracts with Customers. The machine had a carrying amount of RM470,000 at 31 March 2022 and had originally cost RM600,000.

Allie Berhad immediately leased the machine back from the financial ins for a term of 10 years, which is also the machine’s remaining useful life. An annual lease payment of RM72,330 is payable in arrears, with the first payment paid on 31 March 2023.

2

The interest rate implicit in the lease is 8% p.a. At the commencement date of the lease, the present value of future lease payments was RM485,334.

The accounting entries made were as follows:

- The proceeds of RM520,000 were debited to cash at bank and credited to revenue.

- The lease payment of RM72,330 made on 31 March 2023 was credited to cash at bank and debited to finance cost.

3. Depreciation on property, plant and equipment is charged on a straight-line basis. No charge has yet been recognised for the year ended 31 March 2023.

Buildings were estimated as having a 50-year useful life, and plant and machinery a six-year useful life, unless stated otherwise.

New plant was purchased on 1 October 2022 for RM240,000 and recognised at cost in plant and machinery. This was the only purchase made during the year and there were no disposals. All expenses relating to property, plant and equipment should be recognised in cost of sales.

4. On 1 April 2022, Allie Limited issued 70,000 5% RM1 irredeemable preference shares at par. The payment of the dividend is at the discretion of Allie Berhad. The annual preference share dividend was paid on 31 March 2023 and recognised in finance costs.

5. A number of matters were identified after the year end, as follows:

- An electricity invoice received on 10 April 2023 for RM25,600 was for servicing charges of RM6,000 for the three months commencing 1 April 2023,  with the balance being for electricity usage for the three months ended 31  March 2023. This invoice was not included in the above nominal ledger balances. Electricity costs are recognised in administrative expenses.

- A customer who owed Allie Berhad RM6,400 at 31 March 2023 (included in the trade and other receivable balances above), was declared bankrupt in April 2023. It is unlikely that any of the outstanding debts will be recovered.

- Inventories at 31 March 2023 were valued at RM53,400. This figure included 460 units of a product called RT02, valued at a cost of RM200 per unit. Sales

of RT02 in April 2023 were at RM170 per unit.

6. Allie Berhad’s income tax liability for the year ended 31 March 2023 has been estimated at RM122,800. An additional amount of RM12,400 due for the previous year following an Inland Revenue Board investigation. Neither of these amounts has been included in the nominal ledger balances above.

Required:

Prepare a statement of profit or loss for Allie Berhad for the year ended 31 March 2023 and a statement of financial position as at that date, in a form suitable for publication.

 

Answer rating: 100% (QA)

CALCULATIONS Revenue Revenue excluding PT01 deposits RM4928000 PT01 deposits 80 orders RM200 RM16000 Total Revenue RM4944000 Cost of Sales Purchases R... View the full answer