Bintang Bhd, a trader of stationery, was incorporated in Malaysia with an authorized capital of RM100,000,000 consisting of 80,000,000 ordinary shares of RM1.00 each and 10,000,000 5% preference shares of RM2.00 each. The trial balance of Bintang Bhd for the year ended 31 December 2023 is as follows:

Freehold land at cost 5,000,000  
Building at cost 9,100,000  
Plant and equipment at cost 5,850,000  
Motor vehicles at cost 990,000  
Accumulated depreciation on 1 January 2019:    
Buildings   660,000
Plant and equipment   990,000
Motor vehicles   220,000
Ordinary share capital   10,000,000
5% preference share capital   3,000,000
Retained earnings as at 1 January 2019   2,890,000
Reserves   190,000
Rental income   140,000
Interim dividend- Ordinary Shares 435,000  
                          –  Preference Shares 75,000  
Loan from BMMB   870,000
10% debentures   800,000
Account Receivables 650,000  
Account Payables   2,520,000
Sales   9,270,000
Cost of sales 5,716,000  
Rental expenses 200,000  
Staff salaries 1,290,000  
Closing Inventories 480,000  
Cash at bank 156,000  
Debenture Interest 40,000  
Bank Loan Interest 54,000  
Administrative expenses 460,000  
Distribution costs 324,000  
Tax paid 180,000  
Dividend income   120,000
Development cost 670,000  
  31,670,000 31,670,000

Additional information:
1. On 22 January 2024, inventories costing RM200,000 were damaged and had a net realizable value of RM150,000.
2. Sales does not include goods costing RM20,000 sold to a customer who had requested for the goods to be delivered on 2 January 2024. Goods sold were invoiced at RM50,000.

3. Freehold land and buildings are not depreciated. The company’s policy is to provide depreciation as follows:
Plant and equipment 10% on cost
(charged as administrative expenses)
Building 5% on cost
Motor vehicles 10% on cost (charged as selling and distribution expenses)

4. The directors have decided to transfer to general reserve RM500,000.

5. Tax expense for the year was RM200,000.

6. The company tables its annual report by 30 June every year.

Prepare the following statements in a form suitable for publication and in compliance with the Companies Act 2016 (as amended) and approved relevant accounting standards for:

a. Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019.

b. Statement of Financial Position as at 31 December 2019.

c. Notes to the account for Property, Plant and Equipment to accompany the above statements.

Alam Maya Bhd, a trader of scooter boards, was incorporated in Malaysia with an authorized capital of RM100,000,000 consisting of 800,000,000 ordinary shares of RM1 each and 200,000,000 5% preference shares of RM2 each. The trial balance of Alam Maya Bhd for the year ended 31 December 2019 is as follows:

Dr   Cr
Sales   1,000,000,000
Cost of sales 563,980,000  
Administrative expenses 110,000,000  
Sales and distribution expenses 120,000,000  
Bad debts 840,000  
Directors remuneration 760,000  
Interest on debentures

Interest on overdraft



Dividend income   1,800,000
Non-current assets:  
Land 150,000,000  
Building 300,000,000  
Plant and machinery 146,000,000  
Motor vehicles 100,000,000  
Accumulated depreciation 1 January 2019  
Building   55,000,000
Plant and machinery   58,400,000
Motor vehicles   61,480,000
Investment 8,400,000  
Development cost 6,000,000  
Inventories 30,000,000  
Trade receivables 38,000,000  
Bank 19,620,000  
Trade payables   35,000,000
Tax paid 45,000,000  
Bank overdraft   20,308,000
Ordinary Share Capital

5% Preferences Share Capital



Retained Earnings   188,920,000
10% debentures   16,000,000
Interim dividend – OS

– PS



1,646,908,000   1,646,908,000

Additional information:
1. Provisions are to be made for:
a. audit fees of RM200,000, and
b. half year debenture interest.

2. Accrued dividend income was RM200,000

3. The depreciation charge for the year was as follows:
a. Building – RM 15,000,000
b. Plant and machinery – RM14,600,000
c. Motor vehicles – 6,420,000

4. The current year’s tax expense was RM40,700,000.

5. The directors have decided to transfer to general reserve RM1,000,000.

6. On 31 May 2020, the company made a bonus issue of one share for every ten (10) ordinary shares held. The share premium account is to be utilized for this purpose. This transaction has not been recorded. The bonus shares do not rank for dividends for the current year.

7. The directors declared final dividends for the preference shares and 5% for ordinary shares on 31 January 2020.
5%x RM10m = RM500,000 (total dividend that should be paid to the Pref shareholders)
Interim dividend (has been paid) = RM500,000
Final dividend = RM0
5% x RM200m = RM10m (final dividend for OS)

Prepare the following statements in a form suitable for publication and in compliance with the Companies Act 2016 (as amended) and approved relevant accounting standards:
(a) Prepare a Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019.
(b) Statement of Financial Position at 31 December 2019.
(c) Notes to the account for Property, Plant and Equipment to accompany the above statements:

The following is the preliminary trial balance of GemilangBhd. at 30 June 2021:

  Debit Credit
  RM’000 RM’000
Revenue (note 1)     550,000
Cost of sales       411,500  
Administrative expenses         30,900  
Sales and distribution expenses         21,500  
Director’s remuneration           2,320  
Staff benefits expenses           6,770  
Finance expenses (note 3)              700  
Dividend income           1,428
Non-current assets – at cost    
Freehold Land         60,000  
Building         41,200  
Plant and machinery         94,500  
Research and development         15,600  
Accumulated depreciation at 1 July 2020  (note 7)    
Building        20,000
Plant and machinery        24,500
            Research and development           7,800
Investments (note 4)         12,450  
Inventory (note 2)           3,480  
Trade receivables         12,200  
Bank         13,700  
Trade payables           1,200
7% Term Loan   6,550
Bank overdraft (unsecured)              288
Tax paid (note 6)         14,250  
Ordinary share capital         70,000
10% Redeemable preference shares   35,000
Retained earnings as at 1 July 2019         17,604
Deferred tax liability           6,700
        741,070     741,070

Additional information:
1. Part of the revenue is a RM138,000 order that has been recognized, however delivery has been postponed until 15 July 2021 due to manufacturing problems. The sale is made on a credit basis. The value of the goods has been accounted for in the closing inventory.

2. Closing inventories valued at RM125,800 were determined to be damaged, with a net realizable value of RM20,950.

3. Finance expenses of RM700,000 includes:
Interest on bank overdraft 20
Lease rentals 680
The lease rentals were for a plant which was used 10% for administrative purposes and 90% for distribution.

4. Investments comprise financial assets valued at:

Carrying Amount Fair Value
RM’000 RM’000
Fair value through profit or loss 1,050 900
Fair value through other comprehensive income 2,490 2,600
At amortised cost 8,910 8,820
12,450 12,320

None of these investments were acquired or sold during the year.
Fair value shown above is as at 30 June 2021.

5. Dividends on preference shares for the year have not been provided. The preference shares are redeemable at holder’s option.

6. The tax paid account is related to the tax paid during the year for the current year. The current year’s tax expense was estimated to be RM20,500,000 inclusive of an increase to deferred tax liability of RM8,000,000 of which RM33,000 was related to financial assets at fair value through other comprehensive income.

7. Gemilang Bhd depreciates its assets on the following basis. The depreciation for the year has not been made:

  Depreciation expenses based on Annual Percentage


Building Cost 2
Plant and machinery Cost 10
Research and development Cost 20

All depreciation expenses are classified as administrative expenses.

8. The government declared in April 2021 that businesses that employ disabled individuals will be compensated for their expenses regarding the salaries provided to these employees. GemilangBhd received a letter from the government on 27 June 2021 promising a refund to Gemilang for RM175,000 in salary paid to disabled employees hired during the year. On 25 July 2021, the cash was received from the government.

(a) Prepare the statement of comprehensive income for the year ended 30 June 2021.
(b) Prepare the statement of financial position as at 30 June 2021.
Note: Clearly show your workings.


CasaBhdcommenced the construction of an item of preperty,plant and equipment on 1st March 2020 and funded it with RM10 million loan.The rate of interest on the borrowing was 5% per annum. Due to strike no construction took place between on 1st October 2020 and November 2020

Calculate the amount of interest to be capitalised and interest expenses on 31 December 2020.

The Hulk Construction Bhd is an established property development in Melaka, In the middle of the year 2010, the company obtained a project to construct 100 units of residual house in Gaint. A 10% interest borrowing term loan of RM450 million was arranged to part finance the project. The term loan was filly drawn down on 1st November 2012 was completed on 31st December 2015. From the period of 2012 to 2015, surplus fund from the loan were invested in money market intrumnets.

The interest income as follows:

Period Investment Interest income

RM (000)

1.1.2012-31 December 2012 20
1.1.2013-31 December 2013 450
1.1.2014-31 December 2014 200
1.1.2015-31.12.2015 50
Total Interest Income 720

The interest cost on the loan were as follows:

Period Loan Interest Charged RM (000)
1.11.2012-31.12.2012 5,000
1.1.2013-31.12.2013 13,000
1.1.2014-31.12.2014 12,000
1.1.2015-31.12.2015 15,000
Total Interest charged 45,000

Calculate the amount of interest that should be capitalised each year.

Answers to Above Questions on Financial Accounting

Answer 1: The preparation of statement of profit or loss and other comprehensive income for the year ended 31 December 2019 is performed as follows:


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