QUESTION 1 (20 MARKS)

Cik Halimah is an entrepreneur who owned HD Cleaning Services Enterprise (HDCSE).

Cik Halimah appointed you to manage the accounting records. You have been asked to

complete part of the accounting cycle as she would apply for a bank loan. The following

transactions had taken place in the first month (January 2020) of her business operation.

1 January The following assets were contributed by Cik Halimah into the

business:

Cash RM50,000

Furniture and Fitting RM40,000

Office Equipment RM14,000

2 Purchased office supplies from JD Enterprise for RM600 cash.

6 Hired a part time worker to assist Cik Halimah with a salary of

RM1,200 per month.

8 Paid insurance premium for six (6) months period for RM2,500 cash.

11 Performed cleaning services to her customers and received RM10,000

cash.

13 Purchased a van for RM25,000 by paying RM14,000 cash and the

remaining balance was on account.

16 Cik Halimah used RM5,500 of HDCSE's money for her vacation.

17 Paid RM4,000 for the transaction on 13 January.

22 Paid RM1,500 for utility bills.

27 Performed services to customers of RM15,000 and received RM7,000

cash. The remaining balance will be received in February 2020.

28 One of the customers paid HDCSE of RM10,000 for the services to be

performed in February 2020.

30 Paid salary for RM1,200.

REQUIRED:

(a) Record the journal entry/entries for the above transactions during the month of

January 2020. (Explanation is not required).

(13 Marks)

(b) Post all relevant cash journal entries to the Cash Account ledger. Determine the Cash

Account balance after all postings are completed.

(7 Marks)

QUESTION 2 (20 MARKS)

Budi Enterprise is a private investigation business owned by Mr. Budiman. The business

is in operation since the last six years, but all accounts and financial statements have been

prepared by an external accounting firm. It is your responsibility as a new manager with

accounting background to prepare the accounts and financial statements to reduce the

business's cost. It is normal practice for the business where some clients are pay in advance

for the company's services, while other clients make payments after the services have been

rendered. Advanced payments from clients are credited to the Unearned Fees account. The

balances of the accounts appear in the ledger of Budi Enterprise as at 31 December 2019 are

as follows:

Accounts (RM)

Cash8640

Accounts Receivables 2650

Supplies 5350

Prepaid Insurance 2890

Motor Vehicles 45,000

Accumulated Depreciation- Motor Vehicles 27,000

Building 120,500

Accumulated Depreciation- Building 43,380

Accounts Payables 14,990

Unearned Fees 24,000

Wages Payables 1760

Capital, Budiman 58,000

Drawings, Budiman 8,320

Revenue 46,480

Wages Expense 20,180

Insurance Expense 2080

The following transactions are related to year-end adjustments:

1. The amount of insurance premiums expired during the year are RM1,240.

2. The estimated useful life for motor vehicles and buildings are 5 years and 10 years

respectively. The scrap value for buildings is 10% of the original cost and there is no

scrap value for motor vehicles. Budi Enterprise uses straight-line method to depreciate

its fixed assets.

3. Wages accrued on December 31 are RM2,840.

4. Supplies on hand at December 31 are RM560.

5. Fees earned but unbilled on December 31 is RM7,500.

6. Unearned fees of RM20,000 is earned at 31 December 2019.

REQUIRED:

(a) Prepare the Statement of Profit or Loss and Other Comprehensive Income of Budi

Enterprise for the year ended 31 December 2019.

(8 Marks)

(b) Prepare the Statement of Financial Position of Budi Enterprise as at 31 December

2019.

(12 Marks)

QUESTION 3 (20 MARKS)

AM Enterprise, a merchandising business, has been in operation for a few years. The

business used the perpetual inventory system in its transaction recording. Below is the

business's Trial Balance as at 31 December 2019:

AM Enterprise

Trial Balance

as at 31 December 2019

DebitCredit

RMRM

Cash 17,500

Account Receivable 6,200

Merchandise Inventory 8,000

Office Equipment 24,000

Accumulated Depreciation - Office Equipment 7,200

Account Payable 6,500

Capital 42,000

55,70055,700

The transactions occurred during the month of January 2020 are as follows:

1. Purchased merchandise on account from LY Sdn. Bhd., listed price of RM24,000,

trade discount 15%, with credit term of 2/10, n/30, FOB destination.

2. Sold merchandise to NZ Enterprise for RM19,600 under credit terms of 3/15, n/30,

FOB shipping point. The cost of merchandise sold was RM8,800.

3. Returned faulty merchandise to LY Sdn. Bhd. of RM6,000.

4. Sold merchandise to ED Enterprise for cash RM10,000. The cost of merchandise

sold was RM5,400.

5. Paid LY Sdn. Bhd. the amount due within the discount period.

6. Paid salaries expense of RM3,600, rent expense of RM2,800, and miscellaneous

expense of RM3,200.

7. Office equipment is depreciated at RM2,400 per year.

REQUIRED:

(a) Prepare journal entries to record the above transactions and adjustment.

(7 Marks)

(b) Prepare Statement of Profit or Loss and Other Comprehensive Income (multiple step)

for the month ended 31 January 2020 and Statement of Financial Position as at 31

January 2020.

(9 Marks)

(c) Explain the difference between the nature of AM Enterprise as a merchandise

business and EDC Hotels and Resorts as a service business.

(4 Marks)