SET 1 – SS

QUESTION 1

a)
Tenang Bhd
Statement Of Profit Or Loss And Other Comprehensive Income
For The Year Ended 31 December 2021
RM
Sales (29,505k – 100k) 29,405,000 
Cost of sales
(29,505k - 8,750k + 11,500) (20,766,500) 
Gross profit 8,638,500
Dividend income 365,000 
Administrative expenses (3,027,000)
Selling and distribution (399,000)
Finance cost (300,000)
Profit Before Taxation 5,277,500
Tax expense (500,000) 
Profit After Tax 4,777,500

Other Comprehensive Income 

Surplus on revaluation of land 500,000 
Total Comprehensive Income 5,277,500

Workings:

Admin S&D Finance

RM RM RM
Balance as per TB 199,000 
Advertising 75,000 
Salaries 1,650,000 
Utilities 105,000 
Bad debts 11,000 
Directors remuneration 850,000 
Audit fees 8,500 
Depreciation:
-Building [4.5m X 5%] 225,000 
-OE [750k – 225k] X 10%] 52,500 
-MV [1.5m X 10%] X ½ 125,000  125,000 
Loan interest [1m x 10%] 100,000 
Dividend on 5% RPS [4m x 5%] 200,000 
3,027,000 399,000 300,000

( 12 marks)
b)
Tenang Bhd
Statement of Changes in Equity for the year ended 31 December 2021

OSC ARR GR RP
RM RM RM RM
8,000,0
Bal b/d 00  956,000  1,952,000 
Net profit for the year  4,777,500
500,00
Surplus on revaluation 0 
Transfer 300,000  (300,000) 
Interim ordinary
dividend (174,000) 

500,00
Bal c/d 8,000,000   0   1,256,000   6,255,500

( 4 marks)

c)
Tenang Bhd
Statement of Financial Position as at 31 December 2021

Non Current Assets RM

Property, Plant and Equipment  11,097,500
3,800,00
Investments 0 
14,897,500
Current Assets
Inventory (2,311,500 – 11,500) 2,300,000 
Account receivables (2,176k - 62,500) 2,113,500 
Cash at bank 3,105,000 
Tax recoverable (515k – 500k) 15,000 
Total Assets 22,431,000

Equity
Share Capital 8,000,000
Retained profit  6,255,500
Other reserves 1,756,000
16,011,500
Non Current Liabilities
5% Redeemable Preference Shares 4,000,000 
10% Bank Loan 1,000,000 

Current Liabilities
Account payables 1,161,000 
Prepaid sales/sales deposit 100,000 
Accrued audit fees 8,500 
Accrued loan interest 50,000 
Accured RPS dividend 100,000 
Total Equity and Liabilities 22,431,000
( 8 marks)
 PROPERTY, PLANT AND EQUIPMENT

d)
BUILDIN
LAND OE MV TOTAL
G
RM RM RM RM RM
COST/VALUATION
Bal b/d 6,000,000  4,500,000  750,000  2,250,000  13,500,000
Surplus on
500,000  500,000
revaluation
Acquisition 250,000  250,000

Bal c/d 6,500,000 4,500,000 750,000 2,500,000 14,250,000

ACCUMULATED DEPRECIATION
Bal b/d 900,000  225,000  1,500,000  2,625,000
Charge for the year 225,000  52,500  250,000  527,500

Bal c/d 0 1,125,000 277,500 1,750,000 3,152,500

Carrying value 6,500,000 3,375,000 472,500 750,000 11,097,500

( 6 marks)

Total: 30 marks

QUESTION 2

a. Classified as PPE or not.

Yes , can be classified as MFRS 116 Property, Plant and Equipment. The building is tangible
items . Used for production and used more than one accounting period .
( 4 marks)

b. Land
Land cannot be classified as MFRS 116 Property, Plant and Equipment because the land
not held for production/administrative purposes but held the land for undetermined use. The
land shall be classified as MFRS 140 Investment Property.
(3 marks)

c. Building initial costs

RM
Building price 12 500 000
(-) discount (5% x 12 500 000) (625 000)
Legal fees 200 000
Total 12 075 000

Building Furniture 1 500 000

(3 marks)

d. Carrying amount

Building
Carrying amount: 12 075 000 of – (12 075 000/30 years x 10/12 ) = 11 739 583
 Furniture
Carrying amount: 1 500 000 – (1 500 000 x 10% ) = 1 350 000
(5 marks)

e. Gain or loss on disposal

Building
Carrying amount:
Cost 7 500 000
Acc. Depreciation:
7 500 000/20y x 6.5 y (2 437 500)
Carrying amount as at 1 july 2021 5 062 500
- Disposal value (5 200 000)
Gain on disposal 137 500

Journal entry

Dr Bank 5 200 000

Dr Acc Dep 2 437 500 of

Cr Building 7 500 000

Cr Gain on disposal/SOPL 137 500

(5 marks)

f. Land

i. The land can be classified as MFRS 116 Property, Plant and Equipment because its
own by the company and the company intend to construct factory on the land next
year.
( 2 marks)

ii. The company need to recognize increase in value for the land as surplus on
revaluation in asset revaluation reserved account under revaluation model.

Journal entry

Dr Land 150 000

Cr Asset revaluation reserve 150 000

(3 marks)
(Total : 25 marks)
SOLUTION 3

a. Classification of the following items in accordance with respective MFRS standards. 

i. Product X MFRS102 - raw materials —assets held for use in the production
and supply of goods and services .

ii. Lorry MFRS116 – an asset used to deliver the goods to customer

 iii. Inagrow MFRS102 - finished goods — assets held for sale in the ordinary
course of business

    (4 marks)

2^ x ½ = 1 mark)

b. Determine the total cost of the inventory purchased on 16 January 2022. Quantity = 1000
units

RM/unit Total RM

Invoice price 150 150,000

Less: Trade Discount (5) (5,000)

Non-refundable import duties 10 10,000

Rebates (3) (3,000)

Transportation 4 4,000

Handling cost 0.5 500

Cost of inventory purchase 156.5 156,500

(4 marks)

c. Inventories shall be measured at the lower of cost and net realisable value at the end of
accounting period. Hence, the value of inventories on 31 January 2022 is at its cost of
RM20,000 as determined below:
Cost RM100 x 200 units 20,000

NRV RM120 - 10 = 110 x 200 units 22,000

Lower - 20,000
Cost

(3 marks)

(Total: 12 marks)

SOLUTION 4

A.
a) To apply MFRS15, Bintex Bhd must have a contract with Encik Hud and meet all of
the following criteria: 

i. the two parties have approved the contract in writing and committed to
perform their respective obligations^
ii. each party can identify their rights regarding the machine to be transferred^
 iii. each party can identify the payments terms (10% deposit) ^
iv. the contract has commercial substance^
v. probability to Bintex Bhd to collect the consideration/payment from Mr. Hud is
very clear through the contract^
(1 mark + 1 mark)

b) It is a bundle performance obligation to be satisfied by Bintex Bhd to be

transferred to Mr. Hud for the completed machine together with the installation and
after-sales service within 1-year time in exchange for the consideration .
(2 mark)

B. 

Revenue is to be recognised at a point in time when the product is delivered to

Orange Bhd at 30 October 2021.

Journal entry:

Date Particulars Dr (RM) Cr (RM)

30/10/2 Account Receivable 5,000

1

      Sales revenue 5,000

COGS 3,000

Inventory 3,000

30/11/2 Cash 5,000

1

Account Receivable 5,000

(5 marks)

C. The transaction price is the amount of consideration an entity expects to be entitled

to from the customer in exchange for transferring goods and services . In this
case, the company should consider non-cash consideration in determining the
transaction price which is a piece of land that being measured at RM2.7 million, being
the market value of as non-cash consideration for the construction of the hostel.

(3 marks)
 (Total=12 marks)

Question 5

MENTARI BHD
Statement of Cash Flows for the year ended 31 December 2021

Cash Flow From Operating activities

Cash receipt from customer w1 2,500,000 (3)
Cash payment for supplier w2 (1,623,880) (5)
Cash payment for employee w3 (235,520) (3)
Cash payment for administrative expenses w4 (384,600) (5)
Cash generated from operation 256,000
Interest paid (27,500)
Tax paid w5 (44,500) (2)
Net cash inflow from operating activities 184,000

Cash Flow From Investing activities

Cash payment for motor vehicle w6 (185,800) (3)
Cash receipt from motor vehicle w6 50,700 (3)
Cash payment for machinery w7 (191,700) (3)
Cash receipt from machinery w7 90,200 (3)
Net Cash outflow from investing activities (236,600)

Cash Flow From Financing activities

Proceeds from the issue of ordinary shares 225,000 (2)
(1,025,000-800,000)
Repayment of bank loan (250,000-200,000) (50,000) (2)
Proceeds from the issue of 5% debentures 120,000
Dividend paid (38,400)
Net Cash inflow from financing activities 256,600
Net increase in cash and cash equivalent 204,000
Cash and cash equivalent at the beginning of the year 290,800
Cash and cash equivalent at the end of the year 494,800

(21 marks)
Workings:-

Cash and cash equivalent

Beginning Ending Change

Short term investment 2,300 4,500 2,200
Bank 288,500 440,300 151,800
290,800 444,800 154,000

Accounts receivable (w1)

Bal b/d 289,700 Bank 2,500,000
Credit sales 2,525,000 Bal c/d 314,700
2,814,700 2,814,700

Accounts payable (w2)

Bank 1,623,880 Bal b/d 535,500
Bal c/d 459,420 COGS 1,547,800
2,083,300 2,083,300

COGS (w2)
Inventory b/d 272,000 SOPL 1,550,000
Accounts payable 1,547,800 Inventory c/d 269,800
1,819,800 1,819,800

Wages and salaries (w3)

Bank 235,520 Bal b/d 6,320
Bal c/d 5,800 PL 235,000
241,320 241,320

Administrative expenses (w4)

Bank 384,600 Bal b/d 7,900
SOPL 268,200
Director’s remuneration 110,000
Bal c/d 10,500 Rent expenses 9,000
395,100 395,100

Taxation (w5)
Bank 44,500 Bal b/d -
Bal c/d 10,500 SOPL 55,000
55,000 55,000

Motor vehicle (w6)

Bal b/d 536,000 Disposal of motor vehicle 71,800
Bank 185,800 Bal c/d 650,000
721,800 721,800

Acc depreciation (w6)

Disposal of motor vehicle 26,300 Bal b/d 115,200
Bal c/d 167,500 SOPL 78,600
193,800 193,800

Disposal of motor vehicle (w6)

Motor vehicle 71,800 Acc depreciation 26,300
SOPL (Gain) 5,200 Bank 50,700
77,000 77,000

Machinery (w7)
Bal b/d 498,300 Disposal of machinery 120,000
Bank 191,700 Bal c/d 570,000
690,000 690,000

Acc depreciation (w7)

Disposal of machinery 21,800 Bal b/d 212,900
Bal c/d 228,600 SOPL 37,500
250,400 250,400

Disposal of machinery (w7)

Machinery 120,000 Acc depreciation 21,800
SOPL (Loss) 8,000
Bank 90,200
120,000 120,000

END OF SOLUTION