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FAR210 - Feb 2022 - Q
FAR210 - Feb 2022 - Q
INSTRUCTIONS TO CANDIDATES
2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.
4. Please check to make sure that this examination pack consists of:
QUESTION 1
Munawwarah Bhd has involved in business since 2010. Given below is the company’s Trial
Balance as at 31 December 2021:
Additional information:
1. Land is not depreciated. Other property, plant and equipment are depreciated on yearly
basis as follows:
Building: 5% on cost
Plant and machinery: 10% on carrying value
Motor Vehicle: 20% on carrying value
4. The bank loan was secured from Bank Islam Malaysia Berhad on 5 January 2021.
5. Net realisable value of the closing inventories at year end was RM429,000 while the
taxation expense for the year was estimated at RM998,300.
Required:
a. In accordance with the requirements of the Companies Act 2016, MFRS 101
Presentation of Financial Statements and other relevant Malaysian Financial Reporting
Standards:
i. Prepare the Statement of Profit or Loss and Other Comprehensive Income for the
year ended 31 December 2021.
(8 marks)
ii. Present the Statement of Changes in Equity for the year ended 31 December
2021.
(5 marks)
QUESTION 2
Warisan Alam Berhad is a property development company for houses and apartments around
Jengka, Pahang. On 1 January 2020, in fulfilling the increasing market demand, Warisan Alam
Berhad constructed a building to be used as the company’s office and marketing outlet. The
construction of the office and marketing outlet building was completed and ready for its
intended use on 3 March 2021. The building is estimated to be used for 20 years. The
contractor’s costs were RM1,140,000. Warisan Alam also incurred the following costs in the
construction of the building:
Costs RM
Direct materials 138,000
Painting, decoration and advertising 12,000
Outlet launching ceremony 45,000
Direct labour used in construction 94,500
Installation of building security system 25,000
Professional fee for building’s environmental, health & safety 35,000
Engineering & technical overheads 22,500
Interest costs incurred to finance the construction 15,500
General overheads 4,000
A labour strike had caused a cost inefficiency of RM4,500 related to direct labour and a direct
materials wastage of RM8,000. Warisan Alam Berhad also has to pay annual property tax and
license of RM2,500 for the constructed office and marketing outlet building.
The company also has a warehouse building which was purchased on 1 July 2019 at
RM1,375,000. On 1 January 2021, the board of directors decided to revalue the warehouse
building. A professional valuer was hired and estimated the fair value of the warehouse
building on 1 January 2021 of RM1,500,000. The board of directors decided to incorporate the
new value of the warehouse building in the company’s books of accounts.
During 2021, Warisan Alam Berhad experienced a significant declining in market demand. To
meet its working capital requirements, the board of directors decided to sell a piece of the
company’s land in Maran, Pahang for RM1,450,000 on 31 December 2021. The land was
bought by Warisan Alam Berhad ten years ago. On 1 January 2021, the land was revalued to
RM1,200,000 with a revaluation surplus of RM500,000 by an independent professional valuer.
The company depreciates all its building at the rate of 5% per annum on cost, yearly basis.
The financial year end of Warisan Alam Berhad is on the 31 December each year.
Required:
a. Explain briefly whether the constructed office and marketing outlet building satisfies the
definition of an asset of Warisan Alam Berhad.
(3 marks)
b. Explain briefly whether the constructed office and marketing outlet building satisfies the
definition of property, plant and equipment in accordance with MFRS 116 Property, Plant
and Equipment.
(4 marks)
c. Find the initial cost of the constructed office and marketing outlet building as at 3 March
2021.
(5 marks)
d. Calculate the total revenue expenditure for the constructed office and marketing outlet
building that will be charged as an expense in the Statement of Profit & Loss for the
financial year ended 31 December 2021.
(3 marks)
f. Recommend the accounting treatment on the disposal of the land on 31 December 2021.
(5 marks)
(Total: 25 marks)
QUESTION 3
On 1 November 2021, MyRatu Boutique declared that the business was unable to pay the
debt as promised. As a result, CareNot Manufacturing & Trading accepted from MyRatu
Boutique a RM6,000, 12% 45-days note in exchange on 1 November 2021.
Required:
a. List THREE (3) factors that might influence a customer’s credit term.
(3 marks)
b. Present the journal entry in the books of CareNot Manufacturing & Trading, for the
transaction on 1 November 2021.
(2 marks)
c. Determine the maturity date AND maturity value of the note receivable (Use 360 days a
year).
(5 marks)
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 6 AC/FEB 2022/FAR210
d. CareNot Manufacturing & Trading produced the following ageing analysis of receivables
as at 31 December 2021:
No. of days past due Amount outstanding Expected credit loss rate (%)
0 days past due RM460,000 2%
1 – 30 days RM295,000 4%
31 – 90 days RM160,000 8%
Over 90 days RM5,000 100%
CareNot Manufacturing & Trading estimated its expected credit loss rate based on its
historical credit loss experience and adjusted for forward-looking estimates. The
allowance for impairment of trade receivables as at 1 January 2021 was RM50,000.
Required:
QUESTION 4
Segamat Sport Berhad (SSB) trades indoor and outdoor sports equipment around Southern
Malaysia. The following information relates to SSB’s TWO (2) groups of sports equipment
which remained unsold as at 31 December 2021:
Total Total
Non-
Carriage units units Net
Purchase refundable
Group inwards purcased sold realisable
price/unit purchase
(total) during during value/unit
tax/unit
the year the year
Sportex
5% of
(Outdoor
RM120 RM4,500 purchase 450 410 RM138
Sport
price
Equipments)
Champz
5% of
(Indoor
RM80 RM3,500 purchase 700 650 RM75
Sport
price
Equipments)
Additional information:
1. Shipping term for Sportex is FOB shipping point while Champz is FOB destination.
Required:
a. State whether Sportex and Champz are items of inventories for Segamat Sport Berhad
in accordance to MFRS102 Inventories.
(2 marks)
b. List any TWO (2) examples of costs that should be excluded from the cost of inventories
and recognised as expenses in the period in which they are incurred.
(2 marks)
c. Compute the value of inventories for both Sportex and Champz as at 31 December 2021
for Segamat Sport Berhad by applying the group of similar items valuation.
(6 marks)
(Total: 10 marks)
QUESTION 5
Below are relevant extracts from Pitzer Bhd’s financial statements for the financial year ended
31 December 2020 and 31 December 2021:
Additional information:
1. The profit before tax for the year ended 31 December 2021 was RM213,640.
3. During the year, the following transactions incurred for property, plant & equipment:
i. There was a purchase of freehold land & plant and machinery during the year
ii. A piece of land costing RM100,000 had been sold for RM200,000
Required:
a. Prepare the Statement of Cash Flows for the year ended 31 December 2021 for Pitzer
Bhd using the INDIRECT METHOD in accordance with MFRS107.
(20 marks)
b. Cash flows are inflows and outflows of cash and cash equivalents. Discuss TWO (2)
benefits of cash flow information to Pitzer Bhd.
(5 marks)
(Total: 25 marks)