Prepare a trial balance showing the balances in the correct column. List the accounts in numerical order. Total the columns and ensure total debits equal total credits. Assume all accounts have normal balances.

Question 1

The following trial balance was prepared from the books of Cross Trading at its year-end, 31 May, 2019. After the company’s bookkeeper left, the office staff was unable to balance the accounts or place them in their proper order. Individual account balances are correct, but debits were incorrectly recorded as credits and vice versa.

Required:

Prepare a trial balance showing the balances in the correct column. List the accounts in numerical order. Total the columns and ensure total debits equal total credits. Assume all

accounts have normal balances.                                              [20 marks] …3/-

3 BBM205/05

Question 2

Provide two (2) reasons which could lead to the discrepancies between the balances

shown in the bank statement and the cash book. Give examples. [10 marks]

Question 3

Elaborate the eight (8) steps in the accounting cycle.

[10 marks]

Question 4

SY Furniture is a manufacturer of garden furniture. The company has consistently used weighted average cost in valuing inventory, but it is interested to know the effect on its inventory valuation of using First In First Out method (FIFO).

At 31 Mar ch, 2020 the company had inventory of 4,000 standard plastic tables, and has computed its value on each side of the two bases as:

During April 2020 the movements on the inventory of tables were as follows:

Required:-

(a) Using  FIFO,  compute  cost  of  cl osi ng  i nventory,  sal es  and  gross

profi t/l oss as at 30 April 2020. [9 marks]

…4/-

4 BBM205/05

(b) Using Weightage Average Cost method, compute cost of cl osing i nventory,

sal es and gross profi t/l oss as at 30 April 2020 . [8 marks]

For (a) and (b), show relevant workings. In arriving at the total inventory values you should make calculations to two decimal places (where necessary) and deal with each inventory movement in date order.

(c) Explain the difference between perpetual inventory system and periodic system.

Which one is more sophisticate? [3 marks]

Question 5

Ah Jie is owner of Jie Kopitiam. At the end of each month, Ah Jie prepares a bank reconciliation statement for her business bank account. At 31 May 2019 her ledger balance was RM2,759 (credit) and her bank statement showed that she had funds of RM131 at the bank.

She has the following information:

(i) Jie has arranged for RM2,500 to be transferred from her personal bank account into the business bank account. The bank made the transfer on 30 May, but Jie has not made any entry for it in her records.

(ii) On 21 May, Jie withdrew RM100 cash which she did not record.

(iii) Cheque number 202003, which Jie issued to a supplier, appears on the bank statement as RM650. Jie incorrectly recorded the cheque as RM560.

(iv) The bank debited Jie’s account with charges of RM129 during May. Jie has not recorded these charges.

(v) On 31 May, Jie lodged RM457. On the bank statement, this amount is dated 3 June 2019.

(vi) Jie was advised by the bank that she earned RM52 interest for the period in May that her account was in credit. Jie recorded this in May, but the bank did not credit her account until June 2019.

(vii) Three of the cheques issued in May, with a total value of RM942, were not debited on the bank statement until after 31 May.

(viii) A cheque for RM276, issued to a supplier, was cancelled but Jie has not recorded the cancellation of the cheque.

Required:

(a) Show the bank account in Jie’s general ledger, including any adjusting entries required due to the information given in points (i) to (viii). Note: You MUST present your answer in a format which clearly indicates whether each entry

is a debit or a credit. [14 marks]

…5/-

5 BBM205/05

(b) Prepare a reconciliation of the bank statement balance to the corrected balance

on the bank account in Jie’s general ledger. [3 marks]

(c) Indicate how the bank balance will be reported in Jie’s final accounts and the

value to be reported. [3 marks]

Question 6

Below is the trial balance of Happy Meals Caterer as at 31 December 2019.

Additional information:

The closing inventory for Year 2019 was RM40,000.

…6/-