1 (40 MARKS) A. Gogoda Enterprise offers office rental and cleaning services to their client. The following is adjusted trial balance of Gogoda Enterprise for the year ended 31 December 2021: Gogoda Enterprise Adjusted Trial Balance 31 December 2021 Dr. Cr. RM RM Cash 15,400 Accounts Receivable 15,000 Prepaid Insurance 7,500 Building and Equipment 700,000 Accumulated Depreciation- 280,000 Building and Equipment Accounts Payable 5,800 Salaries and Wages Payable 1,100 Unearned Rent Revenue 800 Capital Stock 465,000 Retained Earnings 30,500 Cleaning Service Revenue 35,200 Rent Revenue 38,700 Salaries and Wages Expense 8,100 Sundry Expense 1,600 Insurance Expense 21,500 Utilities Expense 18,000 Depreciation Expense - 70,000 Building and Equipment 857,100 857,100 You are required to: i) Calculate total revenues for the year ended 31 December 2021. (3 marks) ii) Calculate total expenses for the year ended 31 December 2021. (6 marks) iii) Prepare the Balance Sheet as at 31 December 2021. (13 marks) B. State one (1) limitation of the Balance Sheet. (2 marks) C. ITexpert Company sells computers, laptops and technology related accessories with financial year ended 31 December every year. ITexpert had revenues of $360,000 in 2021. The company has not collected on $35,000 of its sales, and still owes $40,000 on $150,000 of inventory they purchased. There was $31,000 inventory on hand at the end of the year. The opening inventory was $23,000. No sales return during the year. The company paid $25,000 in salaries. The owner invested $40,000 in the business and $25,000 was borrowed on a five-year note. The company paid $3,000 in interest that was the amount owed for the year of 2021 and paid $8,000 for a two-year insurance policy effective on 1 January 2021 until 31 December 2022. Rental expenses and depreciation expenses during the year were $23,000 and $2,440 respectively. Prepare the income statement of Itex Company for the year ended 31 December 2021. (16 marks) QUESTION 2 (20 MARKS) The following information is extracted from Andarson Company for the year ended 31 December 2021. Assume that there is no income tax for 2021, prepare a statement of cash flows for the year ended 31 December 2021, using the indirect method. Amortization of patent Depreciation expense Net income Payment of dividends RM 5,000 17,000 73,000 32,000 Purchase of equipment 18,500 Retirement of long-term debt 20,000 Issuance of common stock 25,000 Cash received in the sale of land (includes RM6,000 gain) 56,000 Decrease in accounts receivable 2,800 Increase in inventory 2,300 Decrease in prepaid insurance 850 Increase in accounts payable 1,800 Decrease in unearned revenue 3,900 2 Administrative expense Salary expense Rental expense Insurance expense Cash balance, January 1, 2021 3,500 32,000 26,800 8,400 32,600 Cash balance, December 31, 2021 ? (20 marks) QUESTION 3 (20 MARKS) A. The following information is extracted from Getstar Company's accounting record for the year ended/as at 31 December 2021: Dr. Cr. RM RM Cash 24,400 Accounts Receivable 9,000 Prepaid Insurance 5,500 Capital Stock 200,000 Retained Earnings 33,000 Unearned Revenue 3,800 Revenue 61,000 Operating Expenses 26,000 Cost of Goods Sold (COGS) 37,000 Additional information: Opening balance for capital stock was RM170,000. During the year of 2021, Getstar Company issued 6,000 unit shares of additional capital stock at RM5 per share. There were no other capital transactions. Retained earnings as at 1 January 2021 was RM35,000. Following poor performance for the year ended 31 December 2021, Getstar Company declared no dividend for 2021. Based on the information given above, prepare a Statement of Changes in Equity for Getstar Company for the year ended 31 December 2021. (8 marks) B. While the four financial statements (i.e. income statement, balance sheet, cash flows and statement of changes in equity) contain a lot of information, they don't tell the readers everything they may need to know about a company. Additional information can be found in the notes to the financial statements. Explain the following notes and provide TWO (2) examples for each. i) ii) The summary of significant accounting policies. Subsequent events. (6 marks) (6 marks) QUESTION 4 (20 MARKS) A. One of the objectives of internal control is to safeguard the firm's assets. Safeguarding assets aim to ensure that assets are deployed for their proper purposes and are not vulnerable to misuse or theft. Provide two (2) examples for each of the following components in safeguarding assets of the firm: B. C. i) Control environment ii) Control activities (4 marks) (4 marks) The Fraud Triangle outlines three elements (i.e. Perceived Opportunity, Rationalisation and Perceived Pressure) that typically present the reasons why an individual commits fraud. You are required to: i) ii) Provide one (1) situation that could lead to fraudsters' opportunities to commit fraud. (2 marks) Provide one (1) situation that could lead to fraudsters' pressure to commit fraud. (2 marks) Specifically, provide four (4) examples of how technology helps prevent the manipulation of accounting records. (8 marks)