Convincing Features
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Date
Amino Bhd has the following balances as at 31 December 2024.
| Debit
RM’000 |
Credit
RM’000 |
|
| Turnover | 79,570 | |
| Cost of sales | 31,600 | |
| Administration expenses | 600 | |
| Selling and distribution expenses | 550 | |
| Non-current asset at cost: | ||
| Freehold Land | 7,500 | |
| Buildings | 2,500 | |
| Plant and machinery at cost | 600 | |
| Accumulated depreciation as at 1 January 2024: | ||
| Buildings | 250 | |
| Plant and machinery | 150 | |
| Investment properties at fair value | 7,800 | |
| Intangible asset | 1,500 | |
| Net defined benefit as at 1 January 2024 | 3,000 | |
| Account receivable | 44,600 | |
| Inventory | 12,400 | |
| Bank | 49,280 | |
| Account payable | 1,380 | |
| Tax paid | 5,350 | |
| Dividend paid – 10% cumulative preference shares | 100 | |
| Ordinary shares of RM1 | 10,000 | |
| 10% Cumulative preference shares of RM1 each | 2,000 | |
| 5% Redeemable preference shares of RM1 each | 4,000 | |
| Retained profits as at 1 January 2024 | 70,000 | |
| Share-based payment reserve as at 1 January 2024 | 30 | |
| 167,380 | 167,380 |
The following notes are related to the balances presented above:
1. All non-current assets were purchased on 1 January 2019. Depreciation for buildings and plant and machinery is calculated using the straight-line method over 50 years and 20 years, respectively. Land is not depreciated. Depreciation on non-current assets is classified as administrative expenses.
2. The fair value of the investment properties as at 31 December 2024 was RM8,500,000. Amino Bhd applies the fair value model in accounting for its investment properties.
3. Amino Bhd’s intangible asset has an indefinite useful life. As at 31 December 2024, its fair value less costs to sell was RM1,400,000.
4. Amino Bhd operates a funded defined benefit retirement plan. Based on the latest actuarial valuation, the past service cost was determined to be RM1,000,000. For the year ended 31 December 2024, contributions made to the fund amounted to RM2,000,000, and the current service cost was RM5,000,000. No employees retired during the year. The expected return on plan assets is 10%, and the discount rate is 8%. All contributions and benefit payments were made at the end of the financial year.
As at 31 December 2023, the present value of the defined benefit obligation and the fair value of plan assets were RM4,000,000 and RM9,000,000, respectively. As at 31 December 2024, the present value of the defined benefit obligation and the fair value of plan assets were RM6,000,000 and RM8,000,000, respectively. The company has determined that the present value of future economic benefits as at 31 December 2024 was RM1,500,000.
5. On 1 January 2023, Amino Bhd granted 1,000 share options to each of its 100 employees, conditional upon the employees remaining in service until 31 December 2025. At the grant date, the fair value of each option was estimated at RM1.00 each. On 1 January 2023, the company estimated that 12 employees would leave over the three-year vesting period and therefore forfeit their rights to the share options.
During 2023, no employees left. As at 31 December 2023, the company revised its estimate and expected that 10 employees would leave before vesting. During 2024, three employees left. As at 31 December 2024, the company again revised its estimate and expects nine employees to leave before vesting. All the share options will become exercisable on 31 December 2025.
6. On 1 January 2024, the company issued 1,000,000 units of 2% convertible bonds at RM1 per unit. Each bond is convertible into ordinary shares at a conversion price of RM2 per share. No conversions occurred during the year ended 31 December 2024.
7. On 1 July 2024, the company declared and paid half-year dividend on the 10% cumulative preference shares dividend. On 31 December 2024, the company declared the final dividend on the 10% cumulative preference shares and a 2.5% dividend on the ordinary shares.
8. The dividend on the 5% redeemable preference shares remained accrued at the end of the financial year.
9. An allowance for doubtful debts amounting to RM 600,000 was recognised at the end of the financial year.
10. The financial year-end of Amino Bhd is 31 December 2024. The financial statements are expected to be approved at the Annual General Meeting to be held on 28 February 2025. On 20 December 2024, a customer initiated legal action against the company for an alleged breach of contract. On 27 December 2024, the company’s legal advisers informed the directors that it was unlikely that the company would be found liable.
Accordingly, no provision was recognised as at 31 December 2024, and the matter was disclosed as a contingent liability. However, on 15 January 2025, the court ruled against the company and ordered the company to pay RM300,000 in damages.
11. The income tax rate applicable for the year ended 31 December 2024 is 25%.
Prepare the following financial statements in a form suitable for publication:
i. Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2024. (Calculate the basic earnings per share and diluted earnings per share)
ii. Statement of Changes in Equity for the year ended 31 December 2024.
iii. Statement of Financial Position as at 31 December 2024.
iv. Notes to the Financial Statements for events after reporting period in accordance with MFRS 110 Events After the Reporting Period.
Please show all relevant workings.
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