BKAF1023 INTRODUCTION TO FINANCIAL ACCOUNTING BKAF1023 INTRODUCTION TO FINANCIAL ACCOUNTING QUESTION 1 (15 MARKS) PART B PARTA Mustaqeem also has a sole proprietorship business and he is planning to convert it to a private limited company. As a consultant, give your advice on these two issues: Mustaqeem and Musfirah formed a partnership business named MUM Catering to provide catering services in Kubang Pasu. The following information was extracted from the partnership books of account as at 30 June 2019. (a) The characteristics of a private limited company which makes it different from a sole proprietorship business. (3 Marks) Mustaqeem RM80,000 RM10,000 (b) The rights of ordinary shareholders in a private limited company. Musfirah RM40,000 RM3,000 RM3,500 RM5,000 Capital Withdrawal Salary allowance per month Annual bonus (2 Marks) Based on the partnership agreement, both partners agreed on the following percentage: i. ii. iii. Interest on capital of 10% per annum. Interest on drawings of 5% per annum. Share profits or losses of the business based on the amounts of capital contributed. Additional information: Profit of the business for the year is RM75,000. The partnership was established on 1 July 2018, 2. REQUIRED: (a) Prepare the profit and loss appropriation for MUM Catering for the year ended 30 June 2019. (4 Marks) (b) Prepare the partner's current accounts for the year ended 30 June 2019. (3 Marks) (c) Assume that MUM Catering partnership agreement does not specify the sharing ratio for profit or loss, what will be the amount of share of profit or loss obtained by Mustaqeem and Musfirah for the year ended 30 June 2019? Justify your answer. (3 Marks) 2