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Beccam Bhd financial year ends on 30 June. The diverse activities of the entity include import and
supplies of frozen meat and produce, kitchenware, motocycles and bicycles, household appliances
and a deer farm
Extracts of balances from the books as at 30 June 2020 were:
1. On 28 June 2020, a purchase order was received from a customer, for goods worth RM460,000.
The customer paid a deposit of RM100,000. Beccam Bhd promised to deliver the product by 3
July 2020. This value of RM460,000 was recorded as sales during the year.
2. Net realizable value of the inventory at the end of the financial year amounted to RM4,000,000.
3. The 10% Bank Loan was repaid in full on its due date, 31 March 2020. Interest was payable
semi-anually on 31 March and 30 September. The repayment and final interest for the second
half year were not yet accounted for.
4. Beccam Bhd adopts the revaluation model for its property, plant and equipmenmt. The
balance on the revaluation reserve is a surplus on a revaluation of the freehold land in 2018.
On 1 July 2019, land was revalued at fair market value of RM12,000,000. This revaluation had
not been reflected in the books. Beccam Bhd had no intention of disposing its land and building.
5. Beccam’s deer farm supplies deer meat for the local market and for export to Singapore. The
deer are slaughtered when they are about three-year old. Details of the number of the livestock
at 1 July 2019 and 30 June 2020 are:
1 July 2019
1-day old/ Newborn
30 June 2020
Six-month old (newborn on 1 Jan 2020)
One -year old
Two -year old
Three -year old
3,500 heads (before
The fair value less cost to sell according to the age-group are:
1 Jan 2020
30 June 2020
1 day old/New born
One -year old
Two -year old
Three -year old
At the end of the current year, 3,000 heads of the 3-year old deer were slaughtered and the
carcasses sold at fair value less cost to sell of RM4,300 per deer.
6. On 1 July 2019, Beccam Bhd made a rights issue of 1 for every 5 shares held to date, to existing
ordinary shareholders at RM1.50 per share. At that date, the market price was RM2.10 per
share No record was made of this rights issue.
7. Also on 1 July 2019, RM10,000,000 8% debentures of face value RM1,000 were issued at par.
Similar debts in the market attract an interest rate of 9%. The debentures mature at the end
of 5 years, and are convertible at any time to maturity into 200 ordinary shares of RM1 each
for each debentures.
The present value of RM1 at varying interest rates is:
Beccam Bhd had taken into account the proceeds received from the issue. Financial liabilities are
accounted for at amortized cost using effective interest rate of 9%.
8. Part of the proceeds from the issue of 8% debentures was used to finance the purchase of an
equipment costing RM1,000,000 on 15 November 2019. Depreciation on equipment is on cost
at the rate of 10% per annum. No adjustment has been made in the books of this acquisition.
9. Equipmemt of Beccam included an equipment X which was sold to Callie Bhd on 1 September
2019 at its fair value of RM2,700,000. The equipment was then leased back for 5 years. The
equipment was initially acquired on 1 July 2016 for RM4,000,000. All equipment of Beccam
are estimated to have a useful life of 10 years, at the date of acquisition.
At the inception of the lease, it was reasonably certain that Beccam Bhd will exercise the option
to purchase the equipment at a price lower than its fair value at the end of the lease period. To
obtain the lease, Beccam incurred initial direct costs of RM10,600.
The annual rental payment is RM800,000, payable at the end of each financial year, beginning
30 June 2020. The first payment was made on the due date. Interest rate implicit in the
agreement was 8%.
As at 30 June 2020, the disposal, annual rental payment, related interest and depreciation are not
yet recorded by Beccam Bhd.
The present value of annuity at varying interest rates is:
10. RM400,000 of the intangibles relates to a customer list, acquired on 1 July 2017, and expected
to derive benefits from the customet list for 5 years. The remaining intangible relates to a
government licence, renewable indefinitely. Beccam Bhd adopts the revaluation model for all
its intangible assets.
On 30 June 2020, after a review exercise, the recoverable amount of the customer list was
estimated at RM120,000, and that of the licence was RM415,000.
11. It is the company’s policy to provide full depreciation/amortization in the year of acquisition
but none in the year of disposal or transfer for all assets.
Depreciation charge for the year on building and equipment are to be allocated to the
administration, and selling and distribution department in the ratio of 4:6.
12. As at 30 June 2020, the fair value of investments was RM16,500,000. These investments were
classified at fair value through other comprehensive income.
13. The second-half year preference dividend has not been accounted for.
14. Tax charge for the year was estimated to be RM12,000,000. This does not include an increase
in deferred tax liability of RM500,000.
15. Beccam Bhd adopts the revaluation model for its property, plant and equipment.
Construct the following statements in a form suitable for publication and in compliance with the
Companies Act 2016 and approved accounting standards:
a) Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020
(including disclosure of the Earnings per share and the diluted earnings per share, if applicable).
b) Statement of Changes in Equity for the year ended 30 June 2020.
c) Statement of Financial Position as at 30 June 2020.
d) The following schedules / tables to accompany the above statements:
i. Expenses (tabulate into columns for cost of sales, administration, selling and distribution,
and finance. Categorise amortisation of intangibles under administration expenses)
ii. Property, plant and equipment