Given below is a list of account balances of Adamant Bhd, (a public limited company)
as at 31 October 2021. All balances stated as at 31 October 2021 unless stated
otherwise.
Debit
(RM’000)
Credit
(RM’000)
Purchases and sales revenue 19,200 26,970
Return outwards 50
Inventory (on 1 November 2020) 1,800
Distribution costs 3,200
Administrative costs 2,700
Advertisement 120
Other income (note 3 & 4) 310
Interim dividend paid 120
Tax paid for the financial year 250
Tax overprovided (previous year) 45
Ordinary shares capital 24,000
Reserves (on 1 November 2020):
 Accumulated loss 900
 Revaluation reserve 1,500
Trade payables 12,030
7.5% p.a. bank loan (obtained on 1 January 2021) 4,000
Trade receivables 10,800
Cash and bank (not yet taken into account note 8 & 9) 7,755
Investment in quoted shares (held for trading) 2,100
Investment in 4% p.a. loan stocks (non-current) 4,060
Properties, plants & equipment (on 1 November 2020):
 Freehold land 2,000
 Buildings (useful life of 50 years) 11,000
 Motor vehicles 8,000
Intangible assets (on 1 November 2020):
 Trademarks (renewable every 10 years) 800
 Software 1,400
Accumulated depreciation (on 1 November 2020):
 Buildings 1,760
 Motor vehicles 5,400
Impairment loss allowance (on 1 November 2020) 140
76,205 76,205
Additional information for the financial year 2021:
1. As at 31 October 2021, the inventory at net realisable value of RM1,550,000
and at cost of RM1,580,000.
2. Current year tax expense of RM200,000. The above-mentioned tax paid for the
financial year not yet considering the overprovision of tax.
3. Investment in quoted shares measured at fair value through profit or loss. The
company held 25 million equity shares. During the financial year 2021, the
company already received dividend income at 1 sen per share held. Fair value
of this investment decreased by RM100,000 on 31 October 2021.
4. The company’s investment in 4% per annum loan stocks (par value of
RM4,000,000) was acquired on 1 February 2021 and the interest earned would
be paid on 31 January each year. The effective interest rate at 6% per annum.Part of interest income already recognised in trial balance and another part of
interest income to be recognised as per note 10.
5. Ordinary shares capital increased by RM6,000,000 during the year after
issuance of rights issue.
6. Freehold land measured under revaluation model, but the other properties,
plants and equipment measured under cost model. All intangible assets
measured under cost model.
7. The freehold land was revalued to RM2,250,000 as at the end of the financial
year 2021.
8. At the beginning of the current financial year, several cars used by the
company’s directors costing RM800,000 (accumulated depreciation of
RM540,000) was sold for RM300,000. All transactions to dispose of the cars
were not taken into accounts.
9. The company made payments to acquire new building costing RM1,700,000
(useful life of 50 years) and new cars costing RM300,000 in November 2020
(no record made for both transactions).
10. Year-end adjustments to be made for:
- Interest payable on bank loan and interest receivable on loan stocks.
- Prepaid travelling for marketing staff of RM50,000.
- Software acquired in November 2020 with finite life of 5 years and
amortised on cost (charged to administrative costs).
- Annual depreciation charge on cost for buildings and at 15% on carrying
amount of the remaining motor vehicles. Depreciation of building
charged to cost of sales. Depreciation of motor vehicles charged to
administrative costs.
- Allowance on impairment loss at 2% on balance of trade receivables.
You are required to:
(a) Prepare for external use the Statement of Profit or Loss and Other
Comprehensive Income for the year ended 31 October 2021.
 (show the relevant workings to arrive at total amount of: cost of sales;
distribution costs; and administration costs)