2 Answer ALL questions below. Question 1 The figures in the table below relate to HM Sdn Bhd which is seeking your advice on its financial position 2020 2021 Expected Results November December (RM) (RM) 60,000 70,000 Budgets January February (RM) (RM) 72,000 66,000 March (RM) 60,000 April (RM) 68,000 Sales Materials Direct Labour Overheads 30,000 12,000 35,000 14.000 36,000 14.400 33,000 13,200 30,000 12,000 34,000 13,600 12,600 14.700 15,200 13,800 12,700 14,300 54,600 TOTAL COSTS 63,700 65,600 60,000 54,700 61,900 5,400 6,300 6,400 6,000 5,300 NET PROFITS 6,100 You are provided with the following additional information: . Each month consists of four weeks. 20% of sales are for cash, and 80% on credit. Half the credit customers pay in the month following the month of the sale and the balance two months later, All purchases are on credit and are paid for in the month following the month of the purchase after first deducting a 5% cash discount. Wages are paid one week in arrears. Overheads which include RM2,500 for depreciation each month are otherwise paid in the following month. In January 2021, the company will purchase a new delivery van for RM42,000 less RM6,000 trade in on the old van. Payment will be made 50% in the month of purchase and the balance of 50% in March. The bank balance at start of January 2021 is expected to be RM 2,800 No stock of raw materials or finished goods is held. ..3/ 3 Required: a. Prepare the 4 months Cash Budget from January to April 2021. (17 marks) b. Advise the management concerning the financial position of the company (8 marks) Question 2 RM Capital Below is the Trial Balance of L&G Trading as at 31 December 2019 RM 300,000 Computer & Software 30,000 Office Equipment 12,500 Motor Vehicles 285.000 Sales 885,500 Purchases 525,000 Sales Returns 3.150 Purchases Returns 1.550 Carriage Inwards 1.450 Fire Insurance 2,640 Rental 72,000 Water & Electricity 24,650 Salaries 108,000 Sundry Expenses 750 Printing & Stationery 880 Telephone Charges 3,430 Opening Stocks 42,350 Incentive 5,700 Discount Received 650 Cash in Hand 2,550 Cash at Bank 19,620 Trade Receivables 74,500 Trade Payables 26,470 1,214,170 1,214,170 4 Additional information 1. Stocks on 31 December 2019 was RM45,360 Fixed assets are to be depreciated at 20% on cost. Electricity charges payable as at 31 December 2019 was RM1.250 iv Provision for doubtful debts is set at 2% Required a. Prepare the Statement of Comprehensive Income for the year ended 31 December 2019 (12 marks) b. Prepare the Statement of Financial Position as at 31 December 2019 (8 marks) Question 3 Wendy opened a hair care products shop in Georgetown in September 2020. During the first month of operations, the business completed the following transactions Sep 1 Sep 2 Sep 8 Sep 10 Sep 12 Sep 16 Sep 17 Sep 19 Wendy invested RM80,000 cash into the business, She obtained a bank loan of RM80,000 for the business Bought goods on credit for RM75,000 from Century Saloon Supply Distributed free sample worth RM1,000 from her stocks Shampoo costing RM180 was taken from business stock as a personal gift to her friend Purchased a cash register worth RM2.500 on credit from Smart Solution Brought in his personal computer worth RM3,800 for business use Installed a security system for his office, total bill received from his supplier, Secure System was RM9,600 Withdrawn goods bought for resale for her personal use, value of the goods was RM680 Withdrew RM800 from business bank account for her personal use Sep 24 Sep 28 Required Record the above transactions in the GENERAL JOURNAL. Narratives are not required (20 marks) ...5/- Question 4 a. Ahmad bought a new equipment at RM120,000 on 1 July 2017 He was undecided whether to depreciate the equipment using straight line method or reducing method at 20% per annum The equipment is expected to have no residual value. You are required to calculate the amount of depreciation to be charged against each financial year ending 31 December 2017, 31 December 2018 and 31 December 2019 using the straight line method and reducing balance method Show your answer in the following format: Financial Year ending Straight Line Method RM Reducing Balance Method RM 31 December 2017 31 December 2018 31 December 2019 (9 marks) b. The following are balances brought forward from 31 December 2018 for KC Deco Center RM Motor Vehicles 100,000 RM Less Provision for depreciation (20,000) 80,000 The motor vehicles were depreciated at 15% per annum using reducing balance method. KC bought a new vehicle on 1 October 2019, cost of the new vehicle was RM120,000. You are required to prepare the following accounts for financial year ending 31 December 2019: The Motor Vehicle Account The Provision for Depreciation Account (11 marks) ...6 Question 5 Below are the transactions for Alex in Jan 2019: 1 Alex commenced business by depositing cash RM80,000 in the bank as capital 4 A machine was purchased and paid for with company cheque for RM42,000 8 Alex purchased goods for resale amounting to RM17.500 on credit 12 Alex made a cash sales of RM4.800, cost of good sold was RM2,600 16 Alex received a bank loan of RM30,000, the money was credited to the business bank account 20 Alex brought in his personal car for business use, the car was valued at RM65.000 23 Alex purchased goods for resale amounting to RM35,600, he paid the supplier by cheque 27 Alex paid supplier RM17,000 for the goods purchased on 8 Jan 2018, discount received RM500 30 Alex bought a computer for RM5,200 by cheque Required Prepare the accounting equation for the month of January 2019. (20 marks)