Question

The following account balances are taken from the unadjusted trial balance of Shine MBA
Bhd for the year ended 31 December 2009:

RM’000

Sales 12,168
Purchases 9,992
Salaries and wages 1,760
Other operating costs 1,048
Debenture Interest 120
Share capital 2,400
Share premium account 2,400
Retained profits as at 1 January 2009 880
Machine at cost 12,960
Machine – accumulated depreciation
5,520
Trade receivable 1,456
Cash at bank 168
Stock as at 1 January 2009 120
Trade payable 704
Other creditors 360
Bank overdraft 840
10% Debenture
2,400

The following additional information is available :

1. The stock as at 31 December 2009 is RM2,456,000.

2. Depreciation on machinery is 10% on cost.
3. A dividend has been proposed of RM80,000.
4. The interest payable on the debenture for the second half year has not been
included in the accounts.
5. A general provision against bad debts is to be made at the level of 3% of debtors.
6. The tax rate for 2009 is 25%.

Required :

Prepare the company’s income statement for the year ended 31 December 2009 and
a balance sheet as at that date in accordance with IAS 1. (40 marks)