Answered: (a) Statement of Profit or Loss for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Additional information:

(1) Motor vehicles is to be depreciated at the rate of 5% per annum on the reducing balance method and equipment at a rate of 10% per annum on cost.

(2) The copyright in the above trial balance has a useful life of 20 years.

(3) The company registered a trademark on 1 October 2020 for RM9,000 and has a useful life of 10 years.

(4) Inventory is valued at RM27,000 as at 31 December 2020. Return inward and return outward from credit basis transaction are RM15,000 and RM12,500 respectively.

(5) Provisions are required for the outstanding debenture interest and the preference share dividends. The corporate tax rate is 24%.

(6) The company received cheque for commission amounting to RM30,000. No record was made for the transaction.

(7) On 31 December 2020, the board of directors declared a final ordinary share dividend of RM0.03 per share

(8) Transfer to general reserves amounting RM 8,000.

(9) Provision is to be made for taxation on the current year’s profit amounting to RM12,500 and provision for deferred taxation amounting to RM5,525.

Required:

Prepare the following statements using vertical format presentation:

(a) Statement of Profit or Loss for the year ended 31 December 2020.

(b) Statement of Financial Position as at 31 December 2020.

RM
RM
Motor vehicle
200,000
Accumulated depreciation - motor vehicle (1 January 2020)
Equipment
| Accumulated depreciation – equipment (1 January 2020)
Copyright
Accumulated amortisation - copyright (1 January 2020)
Inventory (1 January 2020)
| Trade receivables / Trade payables
Bank
Ordinary shares of RM 1 each, fully paid
| 5% preference shares of RM 1 each, fully paid
8% Debentures
Retained profit b/f
General reserves
Purchases / Sales
Wages and salaries
General expenses
Interim ordinary dividend
20,000
100,000
30,000
55,000
27,500
17,000
58,000
24,500
45,500
125,000
45,000
40,000
89,800
6,000
125,000
62,500
14,000
16,800
6,000
553,800
ТОTAL
553,800

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution