Tutorial 7 - Intangible.docx

FACULTY OF BUSINESS, MANAGEMENT AND SOCIAL SCIENCES BFI1101 FINANCIAL ACCOUNTING AND REPORTING MAY 2015 SEMESTER

Tutorial 7

Question 1 Below is a trial balance of Lily Sdn Bhd as at 31 December 2009.

Debit RM Sales Cost of sales Administrative expenses Sales and distribution expenses Directors' remuneration Finance expenses Dividend income Land Building Plant and machinery Accumulated depreciation at 31 December 09 Building Plant and machinery Investment property Intangible asset Inventory Trade receivable Bank balance Trade payable Tax paid Long term loan Share capital @ RM1.00 each Share premium Retained earnings 1 Jan 2009 10% Debentures

Credit RM 1,300,000

600,000 25,340 20,000 760 8,000 2,680 100,000 800,000 146,000 50,000 72,000 8,400 7,600 30,000 38,000 95,000 34,000 45,000 20,000 300,000 60,000 69,420 16,000 1,924,100

1,924,100

Additional information: a)

Included in intangible asset is a research cost to gain new knowledge for administrative purposes. The amount spend on this research project is RM5,000.

b)

The company paid a dividend for the year of 20% on the issued capital on May 2009.

c)

During the year, the company incur a project amounting RM4,000 which is on development phase and ready to sell in the market. The future economic benefit is RM7,000 while further development cost is RM2,300. This has not been reflected in the books and the management decided to capitalised it under intangible asset.

d)

One of the company’s building has been deteriorated due to flash flood. The company expected that the recoverable amount to be lower by RM50,000 from its carrying amount.

e)

The company apply fair value to measure the investment property. The fair value of the above investment property as at 31 December 2009 is RM9,400.

Required a)

Statement of comprehensive income for the year ended 31 December 09 (expenses classify by function)

b)

Statement of change in equity for the year ended 31 December 09

c)

Statement of financial position as at 31 December 09.