FINAL EXAMINATION

APRIL 2022 SEMESTER

COURSE : FINANCIAL ACCOUNTING IV

COURSE CODE : PAD2313
DURATION : 2 HOURS 30 MINUTES
FACULTY : BUSINESS AND ACCOUNTANCY
DEPARTMENT : ACCOUNTING, FINANCE AND MUAMALAT
PROGRAMME : DIPLOMA IN ACCOUNTANCY
LECTURER : MDM. SALBIAH HANUM BINTI MOHD HAJALI

INSTRUCTIONS TO CANDIDATES

This paper consists of one (1) section:

Section A – 4 questions (structured questions)

Answer all questions in Section A.

All answers of:

Section A must be answered in the answer booklet provided.

The answer for each question must start on a new page.

Candidates are allowed to use calculator.

Candidates are NOT ALLOWED to bring any unauthorized items into the exam hall
except with the permission of your invigilator.

Do Not Open the Question Paper Until Instructed

This Question Paper Consists of Seven (7) Printed Pages

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SECTION A: STRUCTURED QUESTIONS (100 MARKS)

ANSWER ALL QUESTIONS

QUESTION 1 (30 MARKS)

The following is the Statement of Financial Position of Redup Bhd. as at 31 December

2021.
RM’000
Issued and fully paid capital:
500,000,000 Ordinary shares 500,000

Reserves:
Retained Profit 244,200

Non-Current Liabilities:
200,000,000 10% Redeemable Preference shares 400,000
6% Debentures 40,000
1,184,200
Represented by:
Non-Current Assets (at book value) 300,500
Investment 320,600

Net Current Assets (except bank) 163,100

Cash at bank 400,000
1,184,200

Additional information:

1. On 31 December 2021, the directors resolved to redeem all of the 10% Redeemable
Preference Shares.

2. In order to finance the redemption of the preference shares, 50% of retained profit is
to be used to facilitate the redemption.

3. Additionally, ordinary shares were issued at RM1 partly to finance the redemption.

4. Some of the non-current assets costing RM200 million and with a carrying value of
RM50 million were sold for RMM80,500.

5. Investments costing RM150,000,000 were sold at a loss of RM15,000,000.

6. 5% debentures of RM100,000,000 was issued at 98. The transaction cost incurred

amounting to RM50,000.

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Required:

a. Prepare journal entries for the above transactions (narrations are not required).
(12 marks)

b. Prepare the Statement of Financial Position of the company upon the completion of
all transactions.
(12 marks)

c. Explain the differences between ordinary shares and debenture.

(6 marks)

QUESTION 2 (35 MARKS)

The following were the balances in the ledger of Uzair Holding Berhad as at 31 December
2021.

Debit (RM) Credit (RM)

Issued and fully paid up capital:
Ordinary shares capital 300,000
8% Preference share capital 100,000
General reserve 40,000
Retained profit (1 January 2021) 11,500
10% Debentures 150,000
Bank loan 122,000
Building (cost) 380,000
Plant (cost) 300,000
Office equipment (cost) 150,000
Inventory 33,000
Trade receivables and payables 61,000 54,000
Bank 96,000
Sales 720,000
Purchases 155,000
Rent and utilities 32,800
Advertising 28,000
Salaries 220,000
Administrative expenses 110,000
Selling expense 95,000
Insurance expenses of office building 23,000
Interim ordinary dividend paid 5,200
Interim preference dividend paid 4,000
Debenture interest paid 7,500
Tax paid 22,000
Accumulated depreciation (1 January 2021):
Building 80,000

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Plant 100,000
Office equipment 45,000
1,722,500 1,722,500

Additional Information:

1. Depreciation charges for current year have not been provided and the company has
the following depreciation policy:

Buildings at 2% per annum on cost

Plant at 5% per annum on cost
Office equipment at 10% per annum on cost

2. Closing inventory as at 31 December 2021 was RM81,000.

3. Prepaid selling and distribution expenses amounted to RM15,000.
4. Accrued audit fee amounted to RM32,000.
5. Debenture interest for the second half year has not been provided.
6. Final preference dividend was proposed before financial year end.
7. Tax expense on the current year profit is calculated to be RM17,000.

Required:

Prepare the following statements for Uzair Holding Berhad as per MFRS 101 Presentation
of Financial Statements and Companies Act 2016.

a. Statement of Profit or Loss and Other Comprehensive Income for the year ended 31
December 2021.
(10 marks)

b. Statement of Changes in Equity s at 31 December 2021.

(10 marks)

c. Statement of Financial Position as at 31 December 2021.

(10 marks)

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QUESTION 3 (25 MARKS)

Given below is the Statement of Profit or Loss and Other Comprehensive Income of
Selection Berhad for the year ended 31 December 2021 and Statement of Financial Position
as at 31 December 2020 and 2021.

Selection Berhad
Statement of Comprehensive Income for the year ended 31 December 2021

RM RM
Sales 220,000
Cost of sales (98,000)
Gross profit 122,000
Administrative expenses 25,000
Other expenses (including depreciation of RM2,000) 17,000
Profit on sale of plant and machinery (2,000)
(40,000)
Operating profit 82,000
Interest expense (6,000)
Income from investment 1,000
Gain on sale of investment 2,000
Profit before tax 79,000
Tax expense for the year (22,000)
Profit after tax 57,000
Dividends
Interim 2,000
Final proposed 15,000
(17,000)
Retained profit for the year 40,000

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Selection Berhad
Statement of Financial Position as at 31 December

2021 2020
RM RM RM RM
Non-Current Assets
Land and building 200,000 140,000
Plant and machinery 30,000 40,000
Provision for depreciation (5,000) 25,000 (6,000) 34,000
Motor Vehicles 20,000 20,000
Provision for depreciation (3,000) 17,000 (2,000) 18,000
Long-term investments 30,000 40,000
272,000 232,000
Current Assets
Inventories 7,000 5,000
Receivables 20,000 17,000
Cash at bank 21,000 48,000 6,000 28,000
320,000 260,000
Equity
Ordinary shares 140,000 100,000
Retained earnings 90,000 50,000
10% convertible debentures 50,000 280,000 60,000 210,000

Non-current Liabilities
Bank loan 10,000 20,000

Current Liabilities
Accrued wages and salaries 500 1,000
Payables 12,500 15,000
Tax payable 2,000 1,000
Proposed dividends 15,000 30,000 13,000 30,000
320,000 260,000

Additional Information:

1. RM10,000 of the convertible debentures were converted into 10,000 ordinary shares
on 1 January 2021.

2. The increase in the issued share capital is due to the issue of shares for cash and the
conversion of debentures into shares.

3. Sale of plant and machinery was for cash. There were no purchase of plant and
machinery during the year.

4. Land and buildings were purchased for cash.

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5. Depreciation charge of RM2,000 in the income statement comprise of depreciation of

RM1,000 each for plant & machinery and motor vehicles.

Required:

Prepare a Statement of Cash Flow for Selection Berhad for the year ended 31 December
2021 by using the indirect method as per MFRS 107 Statement of Cash Flow.
(25 marks)

QUESTION 4 (10 MARKS)

A. The draft financial statements of PKP Berhad for the year ended 31 December 2020
was completed on 15 February 2021. The board of director reviewed the financial
statements on 2 March 2021 and authorized them for issue. Subsequently, on 10 March
2021, the audit committee of the company approved the financial statements. The
financial statements were only made available to the shareholders on 31 March 2021
The shareholders approved the financial statement at annual meeting on 18 April 2021.

Required:

Determine the post reporting period of PKP Berhad as accordance to MFRS 110 Events
after the Reporting Period
(3 marks)

B. MFRS 110 has identified two types of post reporting period events. They are adjusting
events and non-adjusting events after the reporting period.

Required:

i. Discuss the accounting treatment for each event.

(5 marks)

ii. Give ONE (1) example for each event.

(2 marks)

END OF QUESTION PAPER

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