Part A QUESTION 1

A. Dr Colin Clark, a veterinar from Australia, has started a pet care business in Shah Alam. Her business was registered under the name of "Vet to Pet-Care Centre". She invited her friend Dr Azimah Hashim to join her business. Dr Azimah contributed RM10,000 capital to the business. They hired 3 workers to help them in the business. A loan applied by Dr Colin from HSBC bank amounting to RM60,000 was also approved and used as capital in the business. RM40,000 of the loan received was used by Dr Colin to buy a van. She also used the money to buy veterinary equipment and pet care equipment. The van would be used by Dr Colin and Dr Azimah for traveling and visiting their customers' places according to the appointment schedules. Cash payments were required for every visit they made. The business also offered other services such as pet consultancy and pet grooming at an affordable price.

Required:

i. Which form of business organisation have Dr Colin and Dr Azimah chosen for their business?

(1 mark)

ii. State any three (3) characteristics of this form of business organisation.

(3 marks)

iii. State any two (2) benefits of this form of business organisation.

(2 marks)

iv. List any three (3) possible revenues that the business will generate.

(3 marks)

v. State any three (3) kinds of expenses might "Vet to Pet-Care Centre" incurs.

(3 marks)

vi. State any four (4) assets and four (4) liabilities that this business might have.

(4 marks)

B. Fill in the gaps below:

Liabilities (RM) Expenses (RM) Assets (RM) Revenues (RM) Capital (RM)

? 50,000 30,000 20,000 50,000

20,000 ? 80,000 30,000 40,000

50,000 20,000 ? 40,000 30,000

60,000 40,000 80,000 ? 20,000

50,000 30,000 100,000 60,000 ?

(5 marks)

Part B

For each of the question below, Identify the effects (increase/decrease) of the following transactions to asset, expense, owner's equity, revenue and liability and state the journal entries using the following format. The answer for the first transaction was provided as example:

Date Effects Journal Entry

Increase Decrease Debit Credit

1 Jan Asset Revenue Cash Sales

QUESTION 1

Pinky Enterprise is a business selling various types of shoes since the year 2007. Below are some of the transactions extracted from Pinky Enterprise for the month of May 2020:

2020

May 2 Purchased of 10 pairs of shoes amounting to RM2,000 from Mayers on credit.

6 Selena, purchased 5 pairs of shoes at a total price of RM750. She paid by cheque.

8 Returned back 1 pair of shoes of RM200 wrongly sent by Mayers.

9 Paid amount owing to Meyers of RM1,800 by cheque.

10 Selena returned back two pairs of shoes of RM 300 wrongly ordered by her.

15 Purchased a new computer for a business amounting to RM 8,000.

19 Bought inventories of shoes amounting to RM10,000 on credit.

28 Linda, the owner of Pinky Trading,took RM2,000cashfrom the business for her personal use.

30 Linda injected capital RM2,000 cash.

31 Banked in all cash in hand.

(20 marks)

QUESTION 2

Harun Enterprise which is owned by Encik Harun closes its accounts on 31 December every year. The followings are business transactions of Harun Enterprise for the month of March 2016.

Date

March 2016

1 The business deposited cash into the business bank account amounting to RM5,000.

2 RM4,000 worth of furniture was purchased for business use from Ali Trading on credit.

5 Encik Harun withdrew cash amounting to RM500 for personal use.

7 Goods worth RM5,000 were sold on credit to Bahagia Enterprise.

12 The business made a credit purchase of goods with a value of RM2,000 from Karina Trading.

15 Encik Abu purchased goods worth RM500 from Harun Enterprise and paid by cash.

17 Bahagia Enterprise returned defective goods to the business worth RM200.

20 A payment by cheque was made to Karina Trading for the amount owed by the business.

25 Cash payment of RM200 was made for electricity bill.

27 A cheque with a value of RM2,000 was received from Cik Dewi for rental income.

(20 marks)

QUESTION 3

Date Transactions

January 2016

1 Cash sales RM5,000. (Example)

3 Credit purchased from Mesra Trading RM9,000.

4 Paid salary and wages RM5,700 by cheque.

9 Received cheque for goods sold RM2,250.

12 Returned goods to Mesra Trading RM300.

16 The owner took cash for personal use RM1,000.

20 Purchased a used motor van and paid by cheque RM10,000.

25 Sold goods on credit to Amanah Trading RM3,000.

26 Transferred business cash in hand into bank RM10,000.

29 Paid electricity bill by cash RM250.

31 Part of the shoplot was rented out and received a cheque amounting RM500 as rental income for January 2016.

(20 marks)

Part C QUESTION 1

The following Trial Balance was extracted from the books of Victoria Enterprise as at 31 December 2020.

Particulars Debit (RM) Credit (RM)

Capital

Land and Building

150,000 331,180

Plant and Machinery 65,000

Furniture and Fittings 30,000

Motor Vehicles

7% Loan from Union Bank 89,000

70,000

Purchases and Sales 35,000 100,500

Inventories as at 1 January 2020 29,000

Return inwards and return outwards 3,500 2,000

Carriage Inwards 2,500

Carriage Outwards 1,500

Discount allowed and discount received 500 700

8% Fixed deposit 50,000

Cash in Hand 8,000

Cash at Bank Commission received 25,000

450

Accounts Receivable and Accounts Payable 19,000 10,000

Salaries and Wages 20,000

Electricity and Water 10,000

Rental expenses 10,000

Bad Debts

Allowance for Doubtful Debts 400

270

Interest on fixed deposit Drawings

Accumulated Depreciation as at 1 January 2020:

700 4,000

Plant and Machinery 6,500

Furniture and Fittings 5,700

Motor Vehicles 17,800

549,100 549,100

Additional information:

1. Inventories as at 31 December 2020 was valued at RM19,000.

2. Victoria Enterprise had 2 workers and they were paid RM800 per month. Both workers received in advance half of their salaries in December 2020.

3. RM2,000 of rental was still accrued.

4. Lygon Trading, one of the customers, was having financial difficulties and hence unable to settle their debts. The customer still owed RM350. Victoria Enterprise decided to write off the debts under the allowance method.

5. Allowance for doubtful debts is to be increased to 3% of the remaining accounts receivable.

6. The loan from Union Bank was taken on 1 October 2020. No interest payment has yet been made.

7. Depreciation for the year were to be provided as follows:

Plant and machinery 10% per annum on cost

Furnitures and fittings 10% per annum on book value

Motor Vehicle 10% per annum on cost

8. The owner of Victoria Enterprise withdrew goods worth RM400 for his personal use. The transaction was not recorded anywhere in the accounts.

Required:

a. Prepare Statement of Profit or Loss for the year ended 31 December 2020.

b. Prepare Statement of Financial Position as at 31 December 2020.

Question 2

(16 marks)

(12 marks)

Syarikat Rara has been in trading business since 2011. The following were the account balances extracted from the books of the business as at 31 December 2019:

LIST OF ACCOUNTS DEBIT (RM) CREDIT (RM)

Capital 224,900

Drawinqs 3,500

Purchases and sales 250,000 400,000

Return Inwards and return outwards 4,150 450

Inventory as at 1 January 2019 65,000

Delivery van at cost 20,000

Office equipment at cost 36,000

Accumulated depreciation as at 1 January 2019:

Delivery van 4,500

Office equipment 10,800

Accounts receivable and accounts payable 90,000 32,000

Insurance expenses 1,600

Allowance for doubtful debts 550

Rent received 1,200

General expenses 2,500

10% Loan from Bank Kita 20,000

Cash at bank 13,250

Water and electricity expenses 2,000

Discount received 450

Carriage inwards 1,850

Commission received 1,000

Rent expense 1,000

Wages and salaries expenses 25,000

10% Long term investment 180,000

695,850 695,850

Additional information:

1. The closing inventories as at 31 December 2019 were valued at RM15 ,000.

2. Account receivables of RM750 were to be written off under allowance method. The allowance for doubtful debts account was increased by RM500.

3. One of the account receivable which was written off three years ago came back and pays RM200 to the business by cheque.

4. Accruals and prepayment for the period were as follows: 5.

Accruals

Rent Received RM 3,500

Wages and salary RM 1,100

Prepayments

Commission received RM 100

Water and electricity RM 1,000

6. Annual depreciation is to be provided as follows: Delivery van 20% on cost, yearly basis

Office equipment 5% on carrying value, yearly basis

7. The interest on loan was still accrued for the year.

8. Drawing of cheque made by the owner amounting RM1,000 was still unrecorded in the books.

9. The investment was made on 31 December 2019.

Required:

a. Prepare Statement of Profit or Loss for the year ended 31 December 2019.

b. Prepare Statement of Financial Position as at 31 December 2019.

(16 marks)

(12 marks