10:23 AM M alll 81 BBFA1113 Final... This question paper consists of 4 questions on 8 printed pages 7 BBFA1113 PRINCIPLES OF ACCOUNTING Question 4 (A) The Trial Balance of Jooly Co. as at 31 August 2020 revealed the following: RM Trade Receivables 50,000 Bad Debts that occurred in the year before the 1,100 closing of accounts Allowance for doubtful debts for last year 2,000 At the closing of the accounts, the owner has decided on the following: 1. To write off an amount of RM600 owed by Billy because the amount could not be recovered from him; 2. It was decided to reduce the allowance for doubtful debts from 4% to 3% for this year as the debt collection system has improved. Required: Use all the information above and prepare the following as at 31 August 2020: (a) Allowance for doubtful debts account; (3 marks) (b) Doubtful debts account; (2 marks) (C) Statement of profit or loss (extract); (2 marks) (d) Statement of financial position (extract). (3 marks) This question paper consists of 4 questions on 8 printed pages10:23 AM M O alll ? 81 BBFA1113 Final... This question paper consists of 4 questions on 8 printed pages BBFA1113 PRINCIPLES OF ACCOUNTING Question 4 (Continued) (B) (a) The inventories valuation rule states that inventories should be valued at the lower of cost and net realisable value. Explain the above statement. (3 marks) (b ) According to the "lower of cost and net realisable value (NRV)" rule, choose the correct value for each inventory item below and calculate the new total for inventories after applying the rule: Inventory Cost NRV Chosen items (RM) (RM) value (RM) A 70 83 B 52 40 C 111 150 D 70 95 47 32 Total 350 400 (3 marks) (c) Your organisation uses the first-in-first-out (FIFO) method of valuing inventories. In the month of July, the closing inventory balance was 160 packets and each packet costs RM20. During the month of August 2020, the following transactions took place: August 5 Purchases of 120 packets at RM25 each; 9 Sales of 180 packets at RM32 each; 13 Purchases of 80 packets at RM28 each; 17 Sales of 160 packets at RM34 each; 21 Purchases of 60 packets at RM30 each. Required: Calculate the cost of sales (cost of goods sold) for the month of August 2020 and the value of the closing inventories based on the first-in-first-out (FIFO) valuation method, showing all relevant workings. (9 marks) [Total: 25 marks] This question paper consists of 4 questions on 8 printed pages