Faculty of Management UNIVERSITI TEKNOLOGI MALAYSIA UJIAN 2 SEMESTER I SESI 2013/2014 (TEST 2 SEMESTER I 2013/2014 SESSION) KOD KURSUS (COURSE CODE) : SHAC 1023 NAMA KURSUS (COURSE) : PERAKAUNAN KEWANGAN (FINANCIAL ACCOUNTING) PROGRAM (PROGRAMME) : SARJANA MUDA (BACHELOR DEGREE) MASA (DURATION) : 2 JAM (2 HOURS) TARIKH (DATE) : 21 NOVEMBER 2013 MARKAH (MARKS) : 40 (CONTRIBUTING TO 20 PERCENT OF THE OVERALL MARKS) ARAHAN KEPADA CALON: (INSTRUCTION TO CANDIDATES) Jawab SEMUA soalan. (Answer ALL questions) KERTAS UJIAN INI TERDIRI DARIPADA 5 MUKA SURAT SAHAJA (TERMASUK MUKA SURAT INI). THIS TEST PAPER CONSISTS OF 5 PAGES ONLY (INCLUDING THIS PAGE). 2 1. The following information was extracted from the ledger of First Year Enterprise as at 30 September 2013: First Year Enterprise Trial Balance as at 30 September 2013 Debit (RM) Credit (RM) Bank 12 300 Debtors 29 080 Creditors 24 370 Stocks at 1 October 2012 29 700 Sales 155 000 Purchases 87 300 Return outwards 4 600 Return inwards 3 960 Discounts allowed 3 740 Discounts received 2 190 Carriage inwards 1 400 Carriage outwards 1 800 Office equipment 15 000 Provision for depreciation – Office equipment 4 500 Motor vehicles 80 000 Provision for depreciation – Motor vehicles 20 000 Land and buildings 150 000 Drawings 3 500 Capital 233 600 General expenses 1 430 Wages and salaries 20 000 Insurance 1 300 Advertising 1 800 Rent received 2 200 Printing and stationary 800 Water and electricity 1 600 Bad debts 1 700 Provision for doubtful debt 1 050 Telephone bill 1 100 447 510 447 510 3 Additional information: (i) Stocks at 30 September 2013 RM26 100 (ii) Amounts owing: Carriage inwards RM300 Wages and salaries RM2 500 Advertising RM430 (iii) Insurance expense for the period RM1 200. (iv) Further bad debts written off RM280. (v) Provision for doubtful debt is estimated at 5% of outstanding debtors. (vi) Rent received in advance RM480. (vii) Provide for discounts on debtors 2% of outstanding debtors (round to nearest figure). (viii) The policy for the depreciation for fixed assets are as follows: Office equipment : 10% per annum on cost. Motor vehicle : 20% per annum on cost. Required: Prepare (a) Statement of Comprehensive Income for the year ended 30 September 2013. (b) Statement of Financial Position as at that date. (30 marks) 4 2. The cash book and the bank statement of ABZ Sdn. Bhd. for the month of September 2013 are as follows: Cash Book 2006 RM 2006 Cheque No. RM June 1 Balance b/d 17 900 June 2 Purchases 1901 5 750 4 Sales 14 500 5 Insurance 1902 2 800 9 Bee Sim 7 300 8 Gian Singh 1903 14 000 10 Muthu 4 200 13 Lam Soon 1904 4 570 21 Commision 1 800 14 Maniam 1905 6 220 24 Kuan Kee 6 800 26 Furniture 1906 3 450 27 Chai Seng 5 400 27 Salaries 1907 2 600 29 Ramadhan 2 550 28 Syawal 1908 3 430 30 Maimun 3 240 30 Rates 1909 1 500 Balance b/d 19 370 63 690 63 690 Date Detail Debit Credit Balance 2006 RM RM RM June 1 Balance 22 000 2 Cheque No. 1898 2 500 19 500 3 Cheque book 15 19 485 4 Cheque No. 1901 5 750 13 735 5 Deposit (sales) 14 800 28 535 6 Cheque No. 1902 2 800 25 735 7 Credit transfer – Raihan 540 26 275 8 Cheque No. 1899 1 600 24 675 10 Cheque No. 1903 14 000 10 675 11 Bee Sim 7 300 3 375 12 Muthu 4 200 7 575 15 Cheque No. 1904 4 750 2 825 16 Interest on fixed savings 2 850 5 675 17 Cheque No. 1905 6 220 (545) 18 Standing order – UDT 440 (985) 20 Commission 1 800 815 21 Bee Sim 7 300 8 115 22 Dividends 1 000 9 115 26 Kuan Kee 6 800 15 915 28 Cheque No. 1907 2 600 13 315 30 Bank charge 10 13 305 5 Note: Any errors of entry occurred are errors in the cash book. Required: (a) Update the cash book. (b) Prepare the bank reconciliation statement as on 30 September 2013. (10 marks) Solutions for Test 2 SHAC 1023 1/201314 Question 1 (30 marks) Statement of Comprehensive Income for the Year Ended 30 September 2013 RM RM RM Sales 155 000 (-) Return inwards (3 960) 151 040 Less Cost of Goods Sold Opening Stocks 29 700 Purchases 87 300 (-) Return outwards (4 600) 82 700 Carriage inwards (1 400 + 300) 1 700 Cost of goods ready for sale 114 100 (-) Closing stocks (26 100) COGS 88 000 Gross profit 63 040 Add: Other revenue Discount received 2 190 Rent received (2 200-480) 1 720 66 950 Less other expenses Bad debt (1 700 + 280) 1 980 General expenses 1 430 Discount allowed 3 740 Carriage outwards 1 800 Depreciation: OE (10% x 15 000) 1 500 Depreciation: MV (20% x 80 000) 16 000 Wages/ salaries (20 000+2 500) 22 500 Insurance (1 300-100) 1 200 Advertising (1 800 + 430) 2 230 Printing & stationery 800 Water & electricity 1 600 Prov for doubtful debt1 390 Prov for discount expense2 547 Telephone bill 1 100 (56 817) Net profit 10 133 Workings: 1. Prov. For Doubtful Debt = 5% x (29 080 -280) = 1 440 » increase in prov for d. debt = 1 440 - 1 050 = 390 2. Prov for Discount Expense = 2% x (29 080 – 280 – 1 440) = 547.2 ~ 547 Statement of Financial Position as at 30 September 2013 Non-current assets (Fixed assets) RM RM RM Land and buildings 150 000 Motor vehicles 80 000 (-) Prov for dep – motor vehicle (20000+16000) (36 000) 44 000 Equipment 15 000 (-) Prov for dep – equipment ( 4 500 + 1 500) (6 000) 9 000 203 000 Current assets Stcks 26 100 Debtors 28 800 (-) Prov for d.debt 1 440 (-) Prov for discount exp 547 26 813 Bank 12 300 Prepaid insurance 100 65 313 268313 Owner’s Equity Capital 233 600 (+) Net profit 10 133 243 733 (-) Drawings (3 500) 240 233 Current Liabilities Creditors 24 370 Accrued expenses1 3 230 Prepaid rent rev 480 28 080 268 313 Workings: 1. Accrued expenses = 300 + 2 500 + 430 = 3 230 …………………………………………………………………………………………………….... Question 2 (10 marks) Cash Book (Bank column) 2013 RM 2006 RM Sep 30 Balance b/d (unadjusted) 19 370 Sep 30 Lam Soon 180 Sales 300 Cheque Book 15 Raihan 540 Bee Sim 7 300 Interest for Fixed Deposit 2 850 UDT 440 Dividend 1 000 Bank charge 10 Balance c/d (adjusted) 16 115 24 060 24 060 Bank Reconciliation Statement as at 30 September 2013 RM RM Balance as at Cash Book (adjusted) 16 115 (+) Unpresented cheque No. Cheque 1906 3 450 No. Cheque 1908 3 430 No. Cheque 1909 1 500 8 380 24 495 (-) Uncredited lodgement (deposit) Chai Seng 5 400 Ramadhan 2 550 Maimun 3 240 11 190 13 305 SHAC 1023 Assignment 1 Question 1 On 1 January 20X9, Mona started a business , Sri Mekar Trading, which sells sports equipment. She brought into the business a used car valued at Rm48,000 and cash RM200,000. The business transactions in January 20X9 for Sri Mekar Trading were as follows: Jan. 2 Opened a bank account with BBMB and transferred cash RM180,000 into the bank. Jan.3 Paid rent RM3,200 by cheque. Paid RM11,200 by cheque for the purchase of office equipment from TC Centre. Jan.5 Received invoices from: Yong Sdn Bhd RM16,000 (after a trade discount of 2%). Jaya Trading RM18,000 (after a trade discount of 3%). Jan.6 Mona withdrew cash RM2,400 for her own use. Jan.7 Cash sales of RM2,600 was credited into the bank. Jan.8 Paid service maintenance on car RM280 by cash. Jan.10 Received cash RM60 from customer for repairing sports equipment Jan.12 Cash sales RM1,620 Jan.13 Received a credit note from Yong Sdn Bhd for goods returned to the amount of RM1,200 (after trade discount). Jan.14 Credit sales to Masitah RM4,800. Jan.15 Purchased a car on credit from Sigma Motor costing RM40,000 and paid RM3,000 by cheque for installing a radio unit in the car. Jan.16 Mona took a table tennis set which cost RM800 for her personal use. Jan.18 Received a cheque less 2% discount from Masitah to settle her account. Jan.23 Paid office expenses by cash RM500. Jan.30 Cheque received from Masitah on 18 January was returned due to insufficient funds. Required: (a) Journalise the above transactions into the relevant journals. You are required to close the journals at the end of the month. (Narrations are required.) (b) Post the journalized transactions into the appropriate ledgers. Use T-accounts. (Closing off accounts is not required.) (c) Briefly describe two direct users of financial reports and their reasons for using such reports. Question 2 The following are transactions of Seri Enterprise in the month of January 2012: Jan Transactions 1 Start business with initial capital RM80 000 cash and shop lot RM260 000 2 Deposit RM76 000 of the cash into the bank account 3 Purchase of computer and printer RM3 500 from Setia Trading, paid by cheque. Purchase furniture on credit RM7 780 from Ehsan Enterprise. 5 Credit purchases from Maju Mart RM5 200 and Perniagaan Noni RM4 950. Cash purchases RM2 000. 6 Credit sales to Bestari Mart RM2 560 and Barakah Trading RM3 600. Cash sales RM4 690 8 Purchases return to Perniagaan Noni RM50 and to Maju Mart RM70 9 Full payment by cheques to Perniagaan Noni, discount received RM50 and payment to Maju Mart RM2 600 by cash. 10 Sales return from Barakah Trading RM80 13 Received cheque from Bestari Mart and Barakah Trading for full settlement of accounts, after allowing discount RM50 to Bestari Mart and RM70 to Barakah Trading. 15 Drawing of goods for personal use RM2 500 18 Credit purchases from Maju Mart RM5 450 and Cahaya Aiman RM3 700 20 Cash sales RM10 800 22 Deposit cash RM8 000 into the bank account. 24 Credit sales to Jati Enterprise RM3 970 and Aswara Enterprise RM5 490. Cash purchases RM3 700 The owner withdrew money from the business bank account RM2 000 for personal use. Paid salary by cheque RM3 200 Paid electricity bills RM350 by cash. Required: (a) Record all transactions in the respective journals and accounts using the double entry system. (b) Prepare a Trial Balance as at 31 January 2012. Question 3 (a) The following balances are extracted from the book of Perniagaan Samarata Ent on February 1, 2006: Cash in hand 4250 MARA Loans 12 000 Cash in bank 8765 Mortage on Building 71 500 Stocks 8545 Creditor: Ehsan Sdn Bhd 5 350 Premises/Building 121 500 Creditor: SJER 8 125 Equipment 12 500 Creditor: Modalbanyak 2 220 Debtor: BaikBudi Sdn Bhd 7 450 Creditor: Sykt Perabut Tunas 9 500 Debtor: Sukabayar Ent 11 500 Capital ? Drawings 1 950 During the first two weeks of February, Perniagaan Samarata Ent provided the following transactions: Feb 3 Paid Modalbanyak by cheque for full settlement of outstanding balance and received a discount of RM350. Paid RM5 000 to Sykt Perabut Tunas by cheque for the remaining balance of previously purchased equipment. Cash sales RM4 110. Feb 4 Cheques received: RM3 110 from BaikBudi Sdn Bhd and RM4 350 from Sukabayar Ent and allowed discounts of RM140 and RM350 respectively. Sold goods for RM3 120 to MurniJaya Ent and RM1 250 to Mawarni Ent. Feb 5 Credit purchase from Ehsan Sdn Bhd RM8 500, less trade discount of 10%. Cash purchase from Makro Hypermarket RM3 450 by cheque. Feb 6 Paid cash for part time wages RM800 and stationery RM250. Transferred cash to the bank RM5 000. Sold goods on credit to Sukabayar Ent RM1 125 and Mawarni Ent RM880. Feb 8 Cash sales RM3 750. Paid SJER RM2 400 by cheque and received a discount of RM160. Received dividend by cheque RM750. Paid Ehsan Sdn Bhd RM5 000 by cheque and received a discount of RM250. Feb 9 Received a notice from the bank informing that the cheque from BaikBudi has been dishonoured. Cash purchase from Makro Hypermarket RM5 800 by cheque. Sold goods to BaikBudi Sdn Bhd RM2 450. Feb 10 Purchased additional equipment from Sykt Perabut Tunas for RM5 500 and paid RM 1000 by cheque. BaikBudi Sdn Bhd returned goods RM450. Feb 11 BaikBudi Sdn Bhd repaid the dishonoured cheque within discount period. Credit purchase from Modalbanyak RM2 560. Cash sales RM3 250. Feb 12 Received cheques: MurniJaya Ent RM500 and Mawarni Ent RM300. Sold goods to MurniJaya Ent RM4 150. Feb 13 Wrote cheques for personal use RM750 and utility bills RM1 950. Transferred cash to bank RM4 000. Feb 14 Returned goods to Modalbanyak RM560. Required: a. Enter the above transactions in General Journal (opening entries are not required), Purchase Journal, Purchase Journal, Return Inward Journal and Return Outward Journal. b. Prepare the Three-column Cash Book. c. Post all entries in their respective accounts in the General Ledger and Creditors Ledger. d. Close and balance off all the account and prepare a trial balance as at February 15, 2006. 1 Assignment 2 SHAC 1023 INTRODUCTION TO FINANCIAL ACCOUNTING Assignment Question From the following trial balances, prepare statement of Comprehensive Income for the period ended and Statement of Financial Position as at that date. 1. Trial Balance as at 30/9/2013 Debit Credit Land and Building 390,000 General Expenses 3,400 Motor Vehicle 134,000 Stocks 13,600 Rent Revenue 2,800 Office Equipment 44,600 Return Outwards 1,300 Return Inwards 500 Discount Allowed 380 Discount Received 160 Drawings 700 Purchases 15,500 Sales 9,600 Cash 24,200 Bank 23,580 Debtors: Adilah 2,000 Sam Yoong 0 Safirah 1,500 Syukri 1,600 Adawiyah 1,100 P. Tze Liang 1,700 Creditors: Afiq 10,000 Alif 0 Abidah 2,600 Maisalmah 2,000 Tan Ent 1,500 Shakina 3,000 Chee Hong Ent 3,600 2 Faiznur 4,600 Capital 617,200 658,360 658,360 Closing Stock was valued at RM 16,000. 2. Trial Balance as at 31 January 2012 RM RM Cash 2,840 Shop lot 260,000 Capital 340,000 Bank 76,410 Salary 3,200 Electricity 350 Return outwards 120 Computer & printer 3500 Furniture 7780 Ehsan 7,780 Purchase 22,500 Maju mart 7,980 Jati enterprise 3,970 Aswara enterprise 5,490 Sales 31,110 Return inwards 80 Drawings 4,500 Cahaya aiman 3,700 Discount allowed 120 Discount received 50 390,740 390,740 Closing Stock was valued at RM 7,500. 3 3. Trial Balance as at 15 Feb 2006 Debit Credit Cash 5,310 Bank 445 Stock 8,545 Land & Building 121,500 Equipment 18,000 Mara Loan 12,000 Mortgage on building 71,500 Capital 67,765 Drawings 2,700 Debtors Baikbudi 6,200 Sukabayar 7,925 Murnijaya 6,770 Mawarni 1,830 Creditor Ehsan 7,750 SJER 5,565 Modal Banyak 2,000 Syarikat Perabut Tunas 9,000 Purchases 19,460 Return Outwards 450 Sales 24,085 Return Inwards 560 Discount Allowed 490 Discount Received 760 Dividend Received 750 Wages 800 Stationary 250 General Expenses 1,950 202,180 202,180 Closing Stock was valued at RM 12,500. 1 Assignment 4 SHAC 1023 SEMESTER 1 2014/2015 1. Yaacob Salleh started his business on selling compact discs (CDs) of local and international artists at Xiri Wakaf Tapai Supermarket. Below are the transactions of his business for the month of November 2012: Nov 1 Opening stock of 450 units CDs at RM22.50 per unit. Purchases: Sales: Nov 2 250 units @ RM23.00 Nov 3 200 units 11 400 units @ RM25.00 9 250 units 16 300 units @ RM24.00 15 200 units 22 350 units @ RM25.00 23 500 units 25 400 units @ RM26.00 29 400 units 30 400 units @ RM25.50 30 480 units The selling price is RM55.00 per unit. Required: (a) Determine the closing stock using First in First out (FIFO) and Weighted Average Cost (AVCO). (b) Calculate the gross profit using FIFO and AVCO. (c) Describe the two advantages and disadvantages of using perpetual inventory system to Yaacob’s business. 2 2. The trial balance of Cita Padu Enterprise as at 31 December 2012 was balanced by the inclusion of the following debit balance: Difference on trial balance suspense account RM12 565 Subsequent investigations revealed the following errors: (i) Discounts received of RM1 620 in June 2012 have been posted to the debit of the discounts allowed account. (ii) Wages of RM14 815 paid in February 2012 have not been posted from the cash book. (iii) A remittance of RM4 700 received from Kelana Sdn. Bhd. in April 2012 has been posted to the credit of Kirana Sdn. Bhd. (iv) In March 2012, the company took advantage of an opportunity to purchase a large quantity of stationery at a bargain price of RM10 000. No adjustment has been made in the accounts for the fact that three-quarter, in value, of this stationery was in stock on 31 December 2012. (v) A payment of RM1 705 to Jauhari Enterprise in October 2012 has been posted in the personal account as RM715. (vi) A remittance of RM15 000 received from Juara Enterprise, a credit customer, in June 2012 has been credited to sales. The draft accounts for the year ended 31 December 2012 showed a net profit of RM123 800. Cita Padu Enterprise has very few personal accounts and therefore does not maintain any control account. Required: (a) Prepare the journal entries necessary to record the above errors. (b) Prepare a suspense account showing the correction of the errors. (c) Compute the corrected net profit for the year ended 31 December 2012 following corrections for the above errors. Assignment 5 SHAC 1023 Semester 1 2014/2015 1. The following is the Trial Balance of Dynasty Sdn. Bhd. as at 31 December 2012. Dynasty Sdn. Bhd. Trial balance as at 31 December 2012 Debit (RM) Credit (RM) Issued and paid-up share capital: Ordinary shares (80 000 units of @ RM1.00 per share) 80 000 10% preference shares (20 000 units of @ RM1.00 per share) 20 000 General reserves 5 000 Share premium 8 000 Retained earnings as at 1 January 2012 21 000 Freehold land 100 000 Plant and machinery at cost 40 000 Fixtures and fittings at cost 12 000 Provision for depreciation – Plant and machinery 16 000 Provision for depreciation – Fixtures and fittings 3 000 Salaries and wages 17 000 Office expenses 3 600 Electricity and water bills 6 400 Rental expenses 6 000 Postage and telephone bills 3 300 Vehicle expenses 4 800 Carriage expenses 4 500 Insurance 3 200 Director remuneration 8 000 Purchases and sales 80 000 180 000 Returns 3 800 2 600 Discounts 2 100 3 000 Bad debts 1 400 Provision for doubtful debts 500 Debtors and creditors 25 000 27 000 Stock as at 1 January 2012 20 000 Cash in hand 3 000 Cash at bank 22 000 366 100 366 100 Additional information: (i) Authorised share capital: 200 000 ordinary shares @ RM1.00 per share. 50 000 10% preference shares @ RM1.00 per share. (ii) Stock as at 31 December 2012 is RM11 500. (iii) Provision for depreciation for the fixed assets are: Plant and machinery: 10% on cost. Fixtures and fittings: 25% on cost. (iv) Electricity bills accrued is RM1 400. (v) One third of the carriage expenses represents carriage inwards. (vi) Wages amounting to RM2 000 is for January 2013. (vii) Accrued office expenses is RM1 200. (viii) Additional bad debts is RM600. (ix) Provision for doubful debts is adjusted to RM1 000. (x) Provision for discounts expenses is 5% net of debtors. (xi) Accrued audit fees is RM2 000. (xii) The directors have decided on the followings: - Dividends to be paid are 10% to preference shares and RM0.20 to ordinary shares accordingly. - Transfer to general reserves is RM5 000. (xiii) Corporate tax is 25%. Required: (a) Prepare the Statement of Comprehensive Income for the year ended 31 December 2012. (b) Prepare the Statement of Financial Position as at 31 December 2012. 2. Aznur Enterprise involves in a construction business. As at 1 May 2011, the business has three lorries and the details are as follows: Registration number Date of purchases Cost (RM) Residual value (RM) BFN 55 1 July 2008 75 000 15 000 WKJ 66 1 January 2010 80 000 25 000 WKL 77 1 June 2011 105 000 30 000 During the year ended 30 April 2012, a lorry with the registration number BFN 55 has been sold on 1 March 2012 for RM25 000 cash. The lorry was immediately replaced on the following day. A new lorry with the registration number WMA 88 has been acquired for which the business paid RM100 000 by cheque. The residual value for the new lorry is estimated at RM40 000. The estimated useful life for all the lorries acquired by Aznur Enterprise is 5 years and it is the business policy to depreciate its fixed assets for each month of ownership during the year in which the fixed assets being acquired and disposed. Required: (a) Prepare the Motor Vehicle Account for the year ended 30 April 2009, 2010, 2011 and 2012. (b) Prepare the Provision for Depreciation Account for the year ended 30 April 2009, 2010, 2011 and 2012. (c) Prepare the Disposal of Motor Vehicle Account for the year ended 30 April 2012. (d) Encik Azfar, the owner of Aznur Enterprise has suggested that he wants to alternate the depreciation methods for the motor vehicles every two years between the straight-line method and the reducing balance method. Advise Encik Azfar on this matter with a reference to an accounting principle. Question 4: Cita Padu Enterprise (a) Journal entries Particulars RM RM (i) Dr Suspense Cr Discount allowed Cr Discount Received 3 240 1 620 1 620 (ii) Dr Wages Cr Suspense 14 815 14 815 (iii) Dr Kirana Sdn. Bhd. Cr Kelana Sdn. Bhd 4 700 4 700 (iv) Dr Stationery (B/S) (3/4 * 10 000) Cr SCI 7 500 7 500 (v) Dr Jauhari Ent. Cr Suspense 990 990 (vi) Dr Sales Cr Juara Ent. 15 000 15 000 (12 marks) (b) Suspense Account RM RM Balance as per Trial Balance 12 565 (ii) Wages 14 815 (i) Discount allowed 1 620 (v) Jauhari 990 (ii) Discount received 1 620 15 805 15 805 (c) Computation of corrected net profit for the year ended 31 December 2012 RM RM Net profit (unadjusted) 123 800 Add: Discounts 3 240 Stationery stock 7 500 10 740 Less: 134 540 Wages 14 815 Sales 15 000 (29 815) Corrected net profit 104 725 Note: (iii) and (v) do not affect profit. 1 1. The following is the trial balance of Syarikat Nadi Sdn. Bhd. as at 31 December 20x7: Syarikat Nadi Sdn. Bhd. Trial Balance as at 31 December 20x7 RM RM Ordinary shares capital (Issued and fully paid up) 100 000 Preferred premium shares 10 000 General reserve 30 000 Retained earnings 25 000 Premises 130 000 Motor vehicles (at cost) 50 000 Provision for depreciation- Motor vehicles 20 000 8% Debenture 15 000 Purchases 145 000 Sales 240 500 Returns outwards 1 000 Return inwards 3 000 Carriage inwards 1 500 Carriage outwards 2 400 Stock 25 000 Salaries 24 000 Insurance 5 000 Water and electricity 3 300 Advertisement 6 000 Director’s remuneration 10 000 General expenses 2 000 Debtors 18 000 Creditors 15 000 Interim dividends 10 000 Bank 8 000 Cash 1 200 Goodwill 12 000 456 500 456 500 Additional information: (a) Stock at 31 December 20x7 was RM32 000. (b) Accrued expenses: Audit fees RM 2 000 General expenses RM 500 Debenture interest RM 1 200 (c) Prepaid insurance was RM 1 500. (d) Provision for depreciation motor vehicles was 20% at cost. (e) Provision for tax is 28% of net profit. (f) The board of directors proposed to transfer RM5 000 to general reserve and to 2 write off goodwill. (g) Authorized share capital is 500 000 ordinary shares at RM1.00 per share. Prepare: (i) Statement of Comprehensive Income for the year ended 31 December 20x7. (ii) Statement of Financial Position as at 31 December 20x7. 2. The following is the trial balance of Orang Kota Sdn. Bhd. as at 30 December 20x5: Syarikat Orang Kota Sdn. Bhd. Trial Balance as at 31 December 20x5 RM RM 80 000 ordinary shares issued and fully paid at RM1.00 per share 80 000 20 000 preferred shares at 10% issued and fully paid at RM1.00 per share 20 000 General reserve 5 000 Premium shares 8 000 Retained earnings at 1 January 20x5 21 000 Land 100 000 Motor vehicles (at cost) 40 000 Fittings and fixtures (at cost) 12 000 Provision for depreciation: Motor vehicles 16 000 Fittings and fixtures 3 000 Salaries 17 000 Office expenses 3 600 Water and electricity 6 400 Rental 6 000 Postage and telephone 3 300 Vehicle expenses 4 800 Carriage 4 500 Insurance 3 200 Director’s allowance 8 000 Sales and purchases 80 000 180 000 Return 3 800 2 600 Discounts 2 100 3 000 Bad debts 1 400 Provision for doubtful debts 500 Creditors and debtors 25 000 27 000 Stock as at 1 January 20x5 20 000 Cash in hand 3 000 Cash in bank 22 000 366 100 366 100 3 Additional information: (a) Authorized ordinary share capital for the company was 200 000 ordinary shares at RM1.00 per share and 50 000 10% preferred shares at RM1.00 per share. (b) Stocks at 31 December 20x5 was RM11 500. (c) Provision for depreciation: Motor vehicles 10% (Straight line method) Fittings and fixtures 25% (Reducing balance method) (d) Accrued water and electricity expense was RM1 400. (e) 1/3 of carriage expense was carriage inwards. (f) Wages expenses included RM2 000 wages paid for subsequent periods. (g) Accrued office expense was RM1 200. (h) Additional bad debt was RM600. (i) Provision for doubtful debt was increased to RM1 000. (j) Provision for discount expense was 5% of net debtors. (k) Accrued audit fee was RM2 000. (l) The board of directors proposed the following: A final payment for preferred share dividends of 10% and ordinary share dividends RM0.20 per share. A transfer of RM5 000 to general reserve. (m) The rate for company tax was 25%. Required: Prepare (a) Statement of Comprehensive Income for the year ended 31 December 20x5. (b) Statement of Financial Position as at 31 December 20x5. 4 SUGGESTED ANSWER FOR Syarikat Nadi Sdn Bhd Syarikat Nadi Sdn Bhd Statement of Comprehensive Income for the year ended 31 December 20x7 (RM) (RM) (RM) Sales 240 500 (-) Return inwards 3 000 Net Sales 237 500 (-) Cost of Goods Sold: Opening Stock 25 000 (+) Purchase 145 000 (-) Return outwards 1 000 144 000 (+) Carriage inwards 1 500 170 500 (-) Closing Stock 32 000 Cost of Goods sold 138 500 Gross Profit 99 000 (-) Expenses: Carriage outwards 2 500 Salaries 24 000 Insurance 3 500 Water and electricity 3 300 Advertisement 6 000 Directors allowance 10 000 General expense 2 500 Audit fee 2 000 Debenture Interests (8% x RM15,000) 1 200 Depreciation 10 000 Net profit before tax 34 000 (-) Tax (28% x RM34 000) 9 520 Net profit after tax 24 480 (+) Retained earnings c/d 25 000 Net profit for appropriation 49 480 Appropriation: Interim dividends 10 000 General reserve 5 000 Goodwill written off 12 000 27 000 Retained earnings b/d 22 480 5 Statement of Financial Position as at 31 December 20x7 RM RM Non-Current Asset Premises 130 000 Motor Vehicles 50 000 (-) Provision for depreciation 30 000 20 000 150 000 Current Asset Stock 32 000 Debtors 18 000 Bank 8 000 Cash 1 200 Expenses 1 500 60 700 (-) Current Liabilities Creditors 15 000 Accrued expenses 3 700 Tax arrears 9 520 Accrued debenture interests 28 220 Working capital 32 480 Net assets 182 480 Financed by: Authorized share capital : 500 000 ordinary shares @ RM1 per share 500 000 Issued and fully paid-up share capital : 100 000 ordinary share capital RM1.00 per share 100 000 Reserve and surplus Premium shares 10 000 General reserve 35 000 Retained earnings 22 480 67 480 Long Term Liabilities Debenture Interest 8% 15 000 Total equity and long-term liabilities 182 480 cash a/c 1-Jan Bal b/d 1,000 3-Jan Fixtures 215 20-Jan sales 4,850 7-Jan Equipment 375 22-Jan Drawings 100 30-Jan wages 280 27-Jan WaterElec 250 31-Jan Bank 3,630 bal c/d 1,000 5,850 5,850 shop rental a/c 2-Jan Bank 535 31-Jan bal c/d 535 capital a/c 31-Jan bal c/d 13,550 1-Jan Bal b/d 13,550 bank a/c 1-Jan Bal b/d 8,000 2-Jan Shop rental 535 9-Jan Sales 8,750 4-Jan Furniture 500 24-Jan Brainy B Nursery 4,900 16-Jan Equipment 270 31-Jan Cash 3,630 19-Jan ELC 5,453 27-Jan Little Tikes 1,750 31-Jan Drawings 500 31-Jan Bal c/d 16,272 25,280 25,280 Equipment a/c 7-Jan Cash (CCTV) 375 31-Jan bal c/d 645 16-Jan Bank (W Dispenser) 270 645 645 Roozel Furniture 31-Jan Bal c/d 1,850 4-Jan Furniture 1,850 Drawings a/c 22-Jan Purchases 200 Cash 100 31-Jan Bank 500 31-Jan Bal c/d 800 800 800 disc received a/c 31-Jan bal c/d 287 19-Jan ELC 287 Little Tikes a/c 10-Jan Return outwards 350 6-Jan Purchases 3,850 27-Jan Bank 1,750 31-Jan Bal c/d 1,750 3,850 3,850 ELC a/c 13-Jan Return outwards 100 11-Jan Purchases 5,840 19-Jan Bank 5,453 Discount received 287 5,840 5,840 Poly Pocket a/c 13-Jan Return outwards 370 6-Jan Purchases 2,700 31-Jan Bal c/d 2,330 2,700 2,700 Duplo a/c 13-Jan Return outwards 120 11-Jan Purchases 6,446 31-Jan Bal c/d 6,326 6,446 6,446 Play Dough a/c 31-Jan Bal c/d 5,750 11-Jan Purchases 5,750 Matel a/c 31-Jan Bal c/d 4,000 11-Jan Purchases 4,000 Fixtures & Fittings a/c (Lightings) 3-Jan Cash 215 31-Jan Bal c/d 215 Delivery van a/c 1-Jan Bal b/d 10,000 31-Jan Bal c/d 10,000 computer&printer a/c 31-Jan bank 3500 31-Jan bal c/d 3500 Furniture a/c 1-Jan Bal b/d 4,550 31-Jan bal c/d 6,900 4-Jan Bank 500 Roozel Furniture 1,850 6,900 6,900 Bank Addin Loan a/c 31-Jan bal c/d 10,000 1-Jan Bal b/d 10,000 Sales a/c 9-Jan Bank 8,750 20-Jan Cash 4,850 31-Jan Total 31-Jan Bal c/d 28,275 Debtors 14,675 28,275 28,275 Purchases a/c 22-Jan Drawings 200 31-Jan Total Creditors 28,586 31-Jan Bal c/d 28,386 28,586 28,586 Return outwards a/c 31-Jan Bl c/d 940 31-Jan T creditors 940 Return inwards 31-Jan Total debtors 470 31-Jan bal c/d 470 disc allowed a/c 24-Jan Brainy B Nursery 100 31-Jan Bal c/d 100 Cleaners wages a/c 30-Jan Cash 280 31-Jan Bal c/d 280 Water & Electricity a/c 30-Jan Cash 250 31-Jan Bal c/d 250 Braimy B Nursery a/c 15-Jan Sales 5,300 18-Jan R inwards 300 24-Jan D Allowed 100 Bank 4,900 5,300 5,300 Lala Land a/c 15-Jan Sales 4,500 18-Jan R inwards 170 31-Jan Bal c/d 4,330 4,500 4,500 Toy Wonders a/c 15-Jan Sales 1,375 31-Jan Bal c/d 1,375 Little Caliph 15-Jan Sales 3,500 31-Jan Bal c/d 3,500 QUESTION 5 Statement of Comprehensive Income for the year ended 31 August 20x9 RM RM RM Sales 63,120 (-) return inwards (220) 62,900 Less: Cost of Goods Sold (COGS) Opening stock 6,830 Purchases 38,220 + Carriage inwards 420 + Duty on purchases 1,830 40,470 (-) Return outwards (225) 40,245 47,075 (-) Closing stock (5,200) Cost of goods sold (COGS) 41,875 GROSS PROFIT 21,025 Add: Revenue Interest received 150 Commission received 1,480 Rent revenue (1,400 – 400) 1,000 Discount received 350 Bad debts recovered 100 24,105 Less: Expenses Advertising 8,500 Maintenance and petrol 2,320 Salaries and wages (8,010 – 600) 7,410 Bad debts (200 + 220) 420 Carriage outwards 500 Electricity, water and telephone (1,220 + 250) 1,470 Interest expense 1,280 Rent expense 2,400 Insurance (2,000 – 600) 1,400 Discount allowed 430 Increase in provision for doubtful debt 75 Depreciation: (3,920 + 2,745 + 720) 7,385 (33,590) NET LOSS (9,485) Statement of Financial Position as at 31 August 20x9 RM RM RM Non-Current Assets Office Equipment 24,500 (-) Prov for depreciation (4,900 + 3,920) (8,820) 15,680 Delivery Van 18,300 (-) prov for depreciation (2,745 + 2.745) (5,490) 12,810 Fixtures and Fittings 7,200 (-) prov for depreciation (2,160 + 720) (2,880) 4,320 32,810 Current Assets Other debtor: 12% loan to Aida 5,000 Accrued interest received 150 Debtors (receivables) (13,720 – 220) 13,500 (-) prov for doubtful debt (600 + 75) (675) 12,825 Closing stock 5200 Cash (3,260 + 100) 3,360 Bank 10,540 Prepaid insurance 600 37,675 70,485 Current Liabilities Payables (Creditors) 7,265 Accrued interest expense 1,280 Prepaid rent revenue 400 Accrued electricity, water and telephone 250 9,195 Non-Current Liabilities 12% Loan from Bank Rakyat 16,000 Owner’s Equity Capital 59.175 (-) Drawings (3,800 + 600) (4,400) (-) Net loss (9,485) 45,290 70,485 QUESTION 6 SRI SHAH ENTERPRISE Statement of Comprehensive Income for the year ended 31 March 20x9 RM RM RM Sales 138,078 Less: Cost of Goods Sold (COGS) Opening stock 11,927 Purchases 77,350 + Carriage inwards 2,610 79,960 91,887 (-) Closing stock (2,136) Cost of goods sold (COGS) (89,751) GROSS PROFIT (35% X 138,078) 48,327 Add: Revenue Interest on fixed deposit (250 + 250) 500 Discount received 500 Bad debts recovered 700 50,027 Less: Expenses Carriage outwards (5,144-2,610) 2,534 Rent and rates (6,622 + 210 – 880) 5,952 Post & stationery 3,001 Advertising (1,330 + 200) 1,530 Salaries and wages 16,420 Bad debts (677 + 103) 780 Increase in prov for Doubtful debt 70 Depreciation (5,800 + 4,000) 9,800 Interest on loan from Mayban (3/12 x 15% x 35,000) 1,313 (41,400) NET PROFIT 8,627 SRI SHAH ENTERPRISE Statement of Financial Position as at 31 March 20x9 RM RM RM Non-Current Assets Equipment 58,000 (-) Prov for depreciation (5,800 + 5,800) (11,600) 46,400 Van 30,000 (-) prov for depreciation (0 + 4000) (4000) 26,000 72,400 Current Assets Prepaid rates 880 Debtors (receivables) (22,120 – 103) 22,017 (-) prov for doubtful debt (130 + 70) (200) 21,817 Accrued interest revenue 250 Cash in hand 1,177 Cash at bank 5,252 10% fixed deposit in BBMB 5,000 Closing stock 2,136 36,512 108,912 Current Liabilities Rent owing (accrued) 210 Payables (Creditors) 16,471 Accrued interest on loan 1,313 17,994 Non-Current Liabilities Loan from Mayban 35,000 Owner’s Equity Capital 55,091 (-) Drawings (7,800) (+)Net Profit 8,627 55,918 108,912 QUESTION 7 Statement of Comprehensive Income for the year ended 31 August 20x9 RM RM RM Sales 376,000 Less: Cost of Goods Sold (COGS) Opening stock 25,500 Purchases (245-500-200) 245,300 + Carriage inwards 2,050 247,350 272,850 (-) Closing stock (13,350) Cost of goods sold (COGS) (259,500) GROSS PROFIT 116,500 Add: Revenue Rent revenue (1800-900) 900 Discount received 1200 Commission received 4500 Interest received (9/12 x 8% x 5,000) 300 Bad Debts recovered 500 7,400 123,900 Less: Expenses Depreciation (880 + 600) 1,480 Carriage outwards 2,050 Telephone 3,000 Bad debts (1800 + 330) 2,130 Salaries & Wages (72,100 – 750) 71,350 General expenses 5,400 Water & Electricity 2,600 Insurance (3400-1275) 2,125 Discount allowed 1,800 Increase in provision for doubtful debts 367 9,2302 NET profit 31,598 Statement of Financial Position as at 31 August 20x9 RM RM RM Non-Current Assets Premises 80,000 Motor Van 20,000 (-) provision for depreciation (4,500 + 880) (5,380) 14,620 Store equipment 6,800 (-)provision for depreciation (1800 + 600) (2,400) 4,400 99,020 Current Assets Bank Cash (4700 + 500) 8,800 Receivable (33000 – 330) 32,670 5,200 (-) Provision for doubtful debt (2000 + 367) (2367) 30,303 Other debtor: 8% loan to Azlan 5,000 Prepaid insurance 1,275 Accrued interest received 300 Closing stock 13,350 64,228 163,248 Current Liabilities Payables (Creditors) 26,800 Prepaid rent revenue 900 27,700 Owner’s Equity Capital 111,900 (-) Drawings (7,000+750+200) (7,950) (+) Net profit 31,598 135,548 163,248 QUESTION 8 Statement of Comprehensive Income for the year ended 31 March 20x9 RM RM RM Sales 253,500 (-) Return inwards (13,000) 240,500 Less: Cost of Goods Sold (COGS) Opening stock 35,400 Purchases (145,000-700) 144,300 + Carriage inwards 4522 148,822 (-) return outwards (10,200) 138,622 174,022 (-) Closing stock (32,000) Cost of goods sold (COGS) 142,022 GROSS PROFIT 98,478 Add: Revenue Discount received 5,250 103,728 Less: Expenses Salaries (36,000 + 500) 36,500 Carriage outwards 2,700 General expenses (6,400-1400) 5,000 Insurance (2,400-800) 1,600 Repair on van 2,850 Discount allowed 2,875 Water & electricity 3,000 Interest expense (1,500 + 1,500) 3,000 Depreciation (18,900 + 1,940) 20,840 (78,365) Net profit 25,363 Statement of Financial Position as at 31 March 20x9 RM RM RM Non-Current Assets Delivery van 94,500 (-) provision for depreciation (28,750 + 18,900) (47,650) 46,850 Fixtures & fittings 19,400 (-)provision for depreciation (7,000 + 1,940) (8,940) 10,460 57,310 Current Assets Closing stock 32,000 Receivables 20,500 (-) provision for doubtful debt (325) (-) provision for discount allowed (255) 19,920 Cash at bank 37,230 Fixed deposit 10,000 Prepaid insurance 800 99,950 157,260 Current Liabilities Payables (Creditors) 12,950 Accrued interest (owing) 1,500 14,450 Non-current liability Loan from mayban finance 24,000 Owner’s Equity Capital 98,547 (-) Drawings (3,500+700+1,400-500) (5,100) (+) Net profit 25363 118,810 157,260 1 Solution for Test II SHAC 1203 Semester 1 2014/2015 Question 1 SOCI = Statement of Comprehensive Income @ Income Statement SOFP = Statement of Financial Position Item Particulars Debit (RM) Credit (RM) (i) Closing stock (SOFP) 30 810 SOCI 30 810 (ii) Prepaid shop rental 6 000 Shop rental 6 000 (iii) Salary and wages 3 840 Accrued salary and wages 3 840 (iv) Commission received 1 050 Prepaid commission received 1 050 (v) Accrued interest received 384 Interest received 384 (vi) Bad debts 2 400 Debtors 2 400 (vii) SOCI (Increase in PDD) 1 116 Provision for Doubtful Debt 1 116 (viii) Depreciation (43 000+ 11 375+ 6 500) 60 875 Prof for Depreciation (MV) 43 000 Prof for Depreciation (F&F) 11 375 Prof for Depreciation (Eq) 6 500 2 Budi Bakti Enterprises Statement of Comprehensive Income for the year ended 30 September 2014 RM RM RM Sales 596 862 - Return inwards 4 080 592 782 Less: Cost of Goods Sold Opening stock 28 350 Purchases 221 616 - Return outwards 6 000 215 616 + Carriage inwards 4 980 + Duty on purchases 8 958 229 554 Cost of goods available for sales 257 904 - Closing stock 30 810 Cost of goods sold 227 094 Gross profit 365 688 Add: Other Income Interest received (987 + 384) v 1 371 Commission received (12 150 – 1 050) iv 11 100 12 471 378 159 Less: Operating expenses Salary and wages (110 700 + 3 840) iii 114 540 Insurance 4 185 Electricity. telephone and water 37 950 Motor vehicle expenses 14 538 Carriage outwards 5 616 Discount allowed 3 270 Shop rental (78 000 - 6 000) ii 72 000 Bad debt (4 500 + 2 400) vi 6 900 Depreciation (43 000 + 11 375 + 6 500) 60 875 Provision for doubtful debts [(85 080 - 2 400)x5%] – 3 018 vii 1 116 Total operating expenses 320 990 Net profit 57 169 3 Budi Bakti Enterprise Statement of Financial Position as at 30 September 2014 RM RM RM Non-Current Assets Motor vehicle 215 000 - Provision for depreciation (86 000 + 43 000) viii 129 000 86 000 Furniture and fittings 91 000 - Provision for depreciation (22 750 + 11 375) viii 34 125 56 875 Shop equipment 52 000 - Provision for depreciation (13 000 + 6 500 ) viii 19 500 32 500 175 375 Current Assets Stock 30 810 Debtors (85 080 – 2 400) vi 82 680 - Provision for doubtful debts (82 680 x 5%) vii 4 134 78 546 Accrued interest received (v) 384 Prepaid shop rental (ii) 6 000 Cash at bank 188 444 304 184 Less: Current Liabilities Creditors 62 460 Accrued salary and wages (iii) 3 840 Prepaid commission received (iv) 1 050 67 350 Working Capital (CA-CL) 236 834 412 209 Financed By: Equity Capital 284 540 + Net profit 57 169 341 709 - Drawing 49 500 292 209 Non-Current Liabilities 120 000 Long-term loan 412 209 OR TOTAL ASSESTS = 175 375 + 304 184 = 479 559 TOTAL LIABILITIES + EQUITIES = 67 350 + 120 000 + 292 209 = 479 559 4 Question 2 (a) Updated Cash Book Balance Cash Book (Bank column) RM RM Balance b/d (unadjusted) 1 310.40 6/10 Bank charges 12.80 25/10 Bank Giro Credit 21.47 10/10 427519 19.47 Error* 9.90 17/10 Standing instruction 32.52 Balance c/d (updated) 1 276.98 1 341.77 1 341.77 (b) Endau Enterprise Bank reconciliation Statement as at 31 October 2014 RM RM Balance as per cash book (updated) 1 276.98 Add: Unpresented cheque: 236131 (Rent) 30.00 236134 (Wages) 52.27 82.27 1 359.25 Less: Uncredited lodgement: Sales 192.80 Balance as per Bank Statement 1 166.45 (c) Item that requires further investigation is purchases with cheque number issued as 236130. It was recorded as RM77.87 in the Bank Statement but was recorded as RM87.77 in the owners’s record. It could be due to error in the books of the owner or vice versa.