QUESTION 1 (10 MARKS) NR Bnd incurred trading losses during each of its last five years and is now planning to run a reduction scheme. NR Bhd's Statement of Financial Position as at 31 December 2021 was as follows: Notes: a) Authorised capital is made up of 1,000,000 ordinary shares of RM1.00 each dan 300,0008% Preference shares of RM1.00 each. b) Preference dividends are in arrears for four years. The directors of NR Bhd adopted the following scheme of capital reduction which was approved by the court. 1. The ordinary shares were to be reduce to RM0.50 per share and preference shares reduced by RM0.30 per share. 2. Assets are to be revalued as follows: Plant and machinery RM120,000 Motor vehicles RM75,000 3. Accumulated losses were to be written off and 5% of the inventories was to be considered obsolete. 4. A piece of land costing RM130,000 was to be sold at RM180,000. The proceeds from in full settiement of the preference dividends in arrears. 5. The preference shareholders agreed to receive 70,000 ordinary shares at RM0.50 each in full settlement of the preference dividends in arrears. 6. Cost of reconstruction amounted to RM7,000 7. Authorised capital was to be restored to its original amount. REQUIRED: a) Journal entries in recording the above scheme on the books of NR Bhd. [5 marks] b) Capital reduction account in the book of NR Bhd. [2 marks] c) The revised Statement of Financial Position as at 1 January 2022. [3 marks] [Total: 10 marks]