Please show all the workings. The final answer for statement of financial positi

Question

Please show all the workings.

The final answer for statement of financial position is RM 2072.40

Question7 The following trial balance for the year ended 30 June 2017 relates to Lian Bhd which manufactures automobile spare parts. Debit RM000 Credit RM'000 Administrative expenses Bank 156 Intangible assets 270 69 inventory as at 30.06.2017 Cost of sales Distribution cost Ordinary shares dividend Ordinary share of RM1 each Interest on bank borrowings Freehold property-at valuation 1 July 016 Freehold property revaluation reserve 1 July 016 Plant and equipment- at cost Plant and equipment-acc depreciation at 1 July 2016 Long term loan Investment property 60 600 25 500 200 98 78 1.180 Retained earnings at 1 July 2016 Tax paid Trade payables and 615 150 367 Trade receivables TOTAL 98 3,084 3,084 Additional information: i. The freehold property had a remaining useful life of 20 years at 1 July 2016. The company's policy is to revalue its property at the end of each year. The fair value of the freehold property at 30 June 2017 was RM526,000. i. On 1 July 2016, an item of plant was disposed for RM35,000 cash. The proceeds have been treated as sales revenue by Jet Li Bhd. The plant is still included in the above trial balance figures at its cost of RMS5,000 and depreciation of RM25.000 (to the date of disposal). All plant is depreciated at 20% per annum using straight line method. i Depreciation expenses are charged to administrative expenses. iv. Intangible assets included capitalised development expenditure of RM84,000 (less accumulated amortisation. The development cost was incurred on 1 July 2014 and should be amortised over 5 years. The remaining intangible assets have indefinite useful lives. v. During the year, a new research and development project commenced incurring RM22,000 for research cost and RM21,000 for development cost. The development cost is qualified to be capitalised and should be amortised over 7 years. Both costs have been paid but have not been recorded in the books of accounts. vi. The investment property is measured based on the fair value model. The fair value is estimated at RM759.000 as at 30 June 2017 Required Prepare a Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2017 for Lian Bhd together with a Statement of Financial Position as at that date in a format suitable for publication. (Show all workings) (30 marks)

Explanation / Answer

Statement of Profit or loss and Other Comprehensive Income for the year ended 30 June 2017 Account Titles Amount (RM'000) Revenue 1145 Cost of Sales 520 Gross Profit 625 Operating Expenses: Administrative expenses 195.6 Distribution Cost 60 Research cost 22 Total Operating expenses 277.6 Operating Profit 347.4 Non-operating expenses: Interest on Bank Borrowings 25 Profit before tax 322.4 Tax paid 150 Net Profit 172.4 Other Comprehensive Income Gain on sale of Property 5 Unrealized gain on fair valuation 69 74 Net Profit and OCI 246.4 Statement of Financial Position as at 30 June 2017 Amount (RM'000) ASSETS Current Assets: Bank 345 Inventory 69 Trade receivables 98 Total Current Assets 512 Fixed Assets: Freehold Property 526 Plant and equipment 43 Less: Accumulated Depreciation -27.6 Total Fixed Assets 541.4 Investment Property 759 Intangible Assets 260 Total Assets 2072.4 LIABILITIES: Current Liabilities: Trade payable and provisions 367 Non-current liabilities: Long term loan 78 Equity: Ordinary Shares 600 Revaluation Reserve 226 Retained Earnings 801.4 Total Equity 1627.4 Total Liabilities and Equity 2072.4 Working Note: Revenue 1180 Less: Proceeds from sale of plant -35 Revenue 1145 Cost of Plant 55 Less: Acc. Depreciation 25 Net book value 30 Proceeds from Sale 35 Gain on sale of Plant 5 Plant at cost 43 Depreciation rate 20% Depreciation expense 8.6 Capitalised Development cost 84 Remaining useful life 3 Annual amortization 28 Development cost to be capitalized 21 Useful life 7 Annual amortization 3 Intangible assets 270 Add: Capitalized development cost 21 Less: Amortization expense (28+3) 31 Intangible assets 260 Investment property fair value 759 Investment property on 1 july 2016 690 Unrealized gain on fair valuation 69

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