Question

Question 4 Below was extract from the books of Piko Sdn Bhd for the year ended 31 December 2019. RM Retained profit 31 December 2018 158,000 Inventory 1 January 2019 39,000 Purchases 550,000 Sales 1,292,000 Share capital 120,000 Distribution expenses 116,000 Administration expenses 241,000 Bad debts 23,500 6% bonds (redeemable in Year 2021) 400,000 Trade receivables 200,000 Trade payables 73,500 Allowance for doubtful debts 6,000 Interest paid on bonds 12,000 Bank 58,000 Dividends paid 105,000 Plant and machinery at cost 920,000 Accumulated depreciation as at 1 January 2019 215,000 8 Additional information: i. Inventory at 31 December 2019 was RM35,000. ii. Depreciation on plant and machinery for the Year Ended December 2019 is to be provided at the rate of 10% at cost. iii. Accrued distribution expenses amounted to RM7,500. iv. Prepaid administrative expenses amounted to RM4,000. v. The allowance for doubtful debts should be adjusted to 2% of the trade receivables as at 31 December 2019. vi. Company tax rate is estimated to be 20% of the profit before tax. Required: a. Prepare the Statement of Comprehensive Income for the year ended 31 December 2019 by adopting the function of expense or “cost of sales” method in accordance with MFRS 101 Presentation of Financial Statements: (Show workings where appropriate) b. The Statement of Financial Position as at 31 December 2019.

Answer 1

a. The preparation of the Statement of Comprehensive Income for the year ended 31 December 2019 is prepared below with the help of spreadsheet:-

With the help of given formulas:-

b. The Preparation of The Statement of Financial Position as at 31 December 2019 is prepared below:-

with the help of given formulas:-