Reference no: EM133127918

Question - Cak Beauty Berhad is a manufacturer of beauty and health products. Cak Beauty Berhad was established in 1997. However, due to increasingly fierce competition from similar product manufacturing companies from within and outside the country, performance and condition Cak Beauty Berhad's finances show a downward trend since 2018, and increasingly tapered in the financial year ended December 2021. This situation caused the holder shares and creditors of Cak Beauty Berhad demanded the management of the company to provide report of estimated financial impact in the event of liquidation.

The financial position of Cak Beauty Berhad as at 31 December 2021 is as follows:

	RM		RM
Cash	54,120	Accounts payable	1,551,000
Accounts receivable	310,200	Notes payable	517,440
Notes receivable	158,400	Salary payable	89,100
Interest on NBT	3,630	Tax payable	13,860
Inventory:		Accrued interest:
Ready goods	369,600	Notes outstanding	7,260
Work In Process	257,400	Leases	56,100
Raw materials	158,400	Leases	1,161,600
Investment in equity of Dezandra Berhad	174,900	Share capital	1,230,240
Equipment	613,800	Retained earnings	(942,150)
Building	1,306,800
Land	277,200
	3,684,450		3,684,450

1. All accounts receivable are secured on notes payable (NBB) amounting to RM290,400. Accounts receivable from Seputeh Berhad and Hiraku Berhad amounting to RM211,200 are expected to be collected by 90%. Account balances receivable from other debtors are expected to be collected only 80%.

2. Notes receivable (NBT) worth RM132,000 is secured on NBB worth RM118,800 together with interest accrued thereon amounting to RM2,640. The realizable value of NBT is expected to be RM125,400.

3. The balance of NBT and accrued interest is expected to be fully collected.

4. Inventory of finished goods is expected to be sold with a profit of 20%.

5. Work in process can be completed with an additional expenditure of RM132,000 where the amount of RM79,200 is the cost of raw materials and the rest is related to labor wages. The finished goods are expected to be sold at a price of RM369,600.

6. Raw materials can be sold at 85% of the cost.

7. The investment in Dezandra Berhad consists of 22,000 units of equity shares with a market value of RM12 per share. The investment is secured on the balance of NBB with accrued interest of RM4,620.

8. Land and buildings have been revalued at RM409,200 and RM660,000 respectively. These assets are secured on leases and interest accrued thereon.

9. A total of RM237,600 is expected to be realized from the equipment.

10. The liquidation expenses are expected to amount to RM55,000.

Required -

a) Prepare Statement of Affairs as at 31 December 2021?

b) Prepare Deficit Statement as at 31 December 2021?