Question 1
The financial year end of Penpaper Trading is on 31 December every year. The accounts receivable of the company at the end of each accounting year are as follows :
| Year | RM |
| 2014 | 46,000 |
| 2015 | 42,000 |
| 2016 | 42,000 |
| 2017 | 38,000 |
| 2018 | 40,000 |
It is thecompany’s policy to set aside 2% on debtors as Provision for Doubtful Debts every year starting from 2014.
You are required to:
| a. | Prepare the following accounts for years 2014 to 2018 :
i) Provision for Doubtful Debts Account. (4 marks) ii) Doubtful Debts Account. (6 marks) |
| b. | Show the effect on the Statement of Comprehensive Income for years ended 31 December 2014 to 2018. (5 marks) |
| c. | Show the Statement of Financial Position (extracts) of debtors for years 2014 to 2018. (5 marks) |
Question 2
Sunrise Bookstore
Cash Book (Bank column only)
| Date | Particulars | RM | Date | Particulars | RM |
| 2018 | 2018 | ||||
| Sep 1 | Balance b/d | 3,200 | Sep 2 | Petty Cash | 500 |
| 2 | Sales | 5,000 | 8 | Purchases | 750 |
| 5 | Jack Stationer | 2,250 | 10 | Peter | 650 |
| 10 | Boon Enterprise | 3,065 | 14 | Telephone | 180 |
| 14 | Sales | 5,008 | 18 | Su Lee | 2,240 |
| 16 | Loan | 10,000 | 21 | Rental | 1,800 |
| 20 | Jeremy | 2,530 | 24 | Chong | 1,560 |
| 24 | John | 4,350 | 26 | Utilities | 720 |
| 28 | Danny | 1,720 | 28 | Wages | 1,200 |
| 30 | Balance c/d | 27,523 | |||
| 37,123 | 37,123 | ||||
| Oct 1 | Balance b/d | 27,523 |
Bank Statement
| 2018 | DR | CR | Balance | |
| Sep 1 | Balance b/d | 1,200 | ||
| 1 | Deposit | 2,000 | 3,200 | |
| 2 | Deposit | 5,000 | 8,200 | |
| 4 | Cheque | 500 | 7,700 | |
| 6 | Deposit | 2,250 | 9,950 | |
| 11 | Deposit | 3,056 | 13,006 | |
| 14 | Deposit | 5,008 | 18,014 | |
| 16 | Cheque | 180 | 17,834 | |
| 16 | Deposit | 10,000 | 27,834 | |
| 18 | Cheque | 750 | 27,084 | |
| 19 | Cheque | 650 | 26,434 | |
| 22 | Deposit | 2,530 | 28,964 | |
| 24 | Cheque | 1,800 | 27,164 | |
| 30 | Cheque | 720 | 26,444 | |
| Bank Charges | 15 | 26,429 |
Required:
| Prepare the bank | reconciliation | statement | as | at | 30 | September 2018 for |
| Sunrise Bookstore. | (20 marks) |
Question 3
Below are the balances extracted from the books of BomohTrading as at 31 March 2018:
| RM | |
| Inventory 1 April, 2017 | 52,550 |
| Machinery | 172,000 |
| Accumulated Depreciation – Machinery | 51,600 |
| Office Equipment | 122,500 |
| Accumulated Depreciation – Office Equipment | 24,500 |
| Motor Vehicles | 472,500 |
| Accumulated Depreciation – Motor Vehicles | 189,000 |
| Cash in Hand | 2,228 |
| Cash at Bank | 36,330 |
| Sales | 1,235,660 |
| Purchases | 525,313 |
| Returns Outwards | 3,698 |
| Returns Inwards | 1,123 |
| Discount Allowed | 2,960 |
| Rental | 82,500 |
| Telephone Charges | 33,250 |
| Upkeep of Motor Vehicles | 36,258 |
| Printing & Stationery | 4,648 |
| Advertisement | 75,600 |
| Salaries | 216,000 |
| Utilities | 44,780 |
| Trade Receivables | 102,700 |
| Trade Payables | 77,682 |
| Capital | 400,000 |
| Provision for Doubtful Debts | 1,100 |
Additional information:
| i. | Closing inventory was valued at RM45,680 |
| ii. | Rental per month was RM7,500 |
| iii. | Non-current assets were depreciated at 10% per annum on cost |
| iv. | Provision for doubtful is set at 3% of trade receivables |
| v. | Accrued Utilities was RM2,530; accrued telephone charges was RM4,860 |
Required:
- Statement of Comprehensive Income for the year ended 31 March
(11 marks)
- Statement of Financial Position as at 31 March (9 marks)
Question 4
Barry Sdn Bhd uses a perpetual inventory system and it uses the LIFO method to assign cost to its inventory. The following are its purchases and sales transactions for its merchandise for the month of September 2018.
| Date | Activities | Units Acquired at
Cost |
Units Sold at Retail |
| 01 Sep | Beginning inventory | 300 units at RM12/unit | |
| 03Sep | Purchases | 300 units at RM14/unit | |
| 04Sep | Sales | 450 units at RM60/unit | |
| 06Sep | Purchases | 300 units at RM14/unit | |
| 14Sep | Sales | 380 units at RM60/unit | |
| 18 Sep | Purchases | 150 units at RM16/unit | |
| 22 Sep | Purchases | 300 units at RM14/unit | |
| 28 Sep | Sales | 480 units at RM60/unit |
Required:
Using the LIFO (Last-In, First-Out) method, assign the inventory cost to the purchases, cost of goods sold, and the balances. (20 marks)
Please use the format below.
Question 5
The functional budgets prepared at Fairlady Sdn Bhd contain the following information:
| April RM000 | May RM000 | June RM000 | July RM000 | August RM000 | |
| Cash sales | 50 | 60 | 55 | 65 | 40 |
| Credit sales | 800 | 750 | 675 | 600 | 550 |
| Materials purchased | 400 | 440 | 460 | 400 | 420 |
| Wages and salaries | 80 | 100 | 120 | 100 | 112 |
| Factory overhead expenses | 135 | 145 | 160 | 155 | 145 |
| Other overhead expenses | 90 | 85 | 92 | 112 | 102 |
Additional details are:
- 4% of all credit sales become bad debts. These bad debts are not included in the overhead budget
- One third of the remaining debtors will pay in the months following delivery; the other two thirds will take an additional month’s
- One half of the amount owing to creditors for materials is paid in the month of purchase, to obtain 3% cash discount for prompt payment. The other half is paid in the month following purchase when no cash discount is allowed by
- 75% of wages and salaries are paid in the month in which they are incurred; the remainder will be paid in the following
- Depreciation is included in the above overhead budgets as follows:
- Plant and machinery – RM45,000 per month
- Office equipment/computers – RM12,000 per month
- All overhead expenses are paid in the month following the month in which they are
- Plant will be sold in July for RM5,000 cash, incurring a loss on disposal of RM22,500.
- Rm102,900 is to be paid in July for purchase of an additional freehold building
- A dividend of RM50,300 is to be paid in August
Required:
Assuming a bank overdraft of RM70,000 on 31 May, prepare a tabular Cash Budget for each of the three months of June, July and August. (20 marks)