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)

BKAL1013 Business Accounting

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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)

Cash

Accounts Receivables

Supplies

Prepaid Insurance

Motor Vehicles

Accumulated Depreciation- Motor Vehicles

Building

Accumulated Depreciation- Building

Accounts Payables

Unearned Fees

Wages Payables

Capital, Budiman

Drawings, Budiman

Revenue

Wages Expense

Insurance Expense

8,640

2,650

5,350

2,890

45,000

27,000

120,500

43,380

14,990

24,000

1,760

58,000

8,320

46,480

20,180

2,080

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.

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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)

BKAL1013 Business Accounting

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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

Debit Credit

RM RM

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

55,700 55,700

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)

BKAL1013 Business Accounting

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(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)

BKAL1013 Business Accounting

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QUESTION 4 (20 MARKS)

Assume that Covidabravo Sdn. Bhd. is a large merchandising wholesale business operating

in Malaysia. The company is affected by the Covid-19 pandemic. Hence, the top

management has called for ideas on potential strategies recommendation to overcome

potential negative impact of the pandemic on profitability and solvency of the company.

As one of the bright new management executives, you are eager to present your

recommendation in the next coming online management meeting. To do that, you need to

show some calculations, based on prior years' financial statements, that support your

recommendations. You concentrated your study of financial statements on the company's

statement of profit or loss and other comprehensive income.

The statement of profit or loss and other comprehensive income for Covidabravo Sdn. Bhd.

of selected prior years is presented below:

Covidabravo Sdn. Bhd.

Statement of Profit or Loss and Other Comprehensive Income

Year Ended 31 December

2019 2018 2017

RM (000) RM (000) RM (000)

Sales** 32,376 30,601 27,799

Cost of merchandise sold 17,405 16,534 15,353

Gross profit 14,971 14,067 12,446

Sales expense 3,278 3,213 3,031

Administrative expense 7,191 6,679 5,735

Total selling and administrative expense 10,469 9,892 8,766

Interest expense 19 28 33

Other income 140 58 -103

Income before income taxes 4,623 4,205 3,544

Income tax expense 863 932 851

Net income 3,760 3,273 2,693

**Assume that all sales are on account.

Below is the excerpt of Covidabravo Sdn. Bhd.'s statement of financial position's data.

2019 2018

Assets RM (000) RM (000)

Current Assets:

Cash and equivalents 3,138 3,852

Short-term investments 2,319 2,072

Accounts receivable (net) 3,241 3,358

Inventories 4,838 4,337

Prepaid expenses and other current assets 1,489 1,968

Total current assets 17,464 18,174

Property, plant and equipment 3,520 3,011

Intangible assets (net) 412 412

Total Assets 21,396 21,597

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The following is additional information (in thousands) related to the company:

RM (000)

Accounts receivable at 31 December 2017 3,117

Merchandise inventories at 31 December 2017 4,142

Total assets at 31 December 2017 18,594

Accounts payable at 31 December 2017 2,131

Total current liabilities at 31 December 2017 6,332

Stockholders' equity at 31 December 2017 12,000

REQUIRED:

(a) Determine the following measures for the fiscal years ended 31 December 2019 and

2018. Round ratios and percentages to one decimal place.

(i) Accounts receivable turnover

(ii) Number of days' sales in receivables

(iii) Inventory turnover

(iv) Number of days' sales in inventory

(v) Ratio of sales to asset

(10 Marks)

(b) What conclusion(s) can be drawn from each of the analysis done in part (a)?

(5 Marks)

(c) Based on your answer in part (b), recommend TWO (2) potential strategies that can

be used to maintain or improve the efficiency of inventory, sales and accounts

receivables management to minimise the impact of Covid-19 pandemic on its

profitability and cash flows.

(5 Marks)

BKAL1013 Business Accounting

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QUESTION 5 (20 MARKS)

TG Sdn. Bhd. is an electrical manufacturing company located in Pagoh. It is a wellestablished company with a favorable reputation for the quality of their products. The

company manages to increase its production to meet their customer's demand. Among the

company's goals is to have a better management in controlling product costs. Presented

below is the information for the year ended 31 December 2019:

RM

Sales 6,300,000

Sales Expenses 210,000

Administration Expenses 135,000

Income Tax Expenses 75,000

Direct Material Purchased 1,650,000

Direct Labour 840,000

Indirect Labour 360,000

Depreciation Expenses - Factory Machine 45,000

Utilities Expenses 135,000

Depreciation Expenses - Factory Building 90,000

Insurance Expenses 60,000

Supplies Expenses 75,000

Other Expenses 90,000

Finished Goods Inventory, 31 December 2019 390,000

Work-in-process Inventory, 31 December 2019 162,000

Direct Material Inventory, 31 December 2019 105,000

Additional information:

1. The opening inventory on 1 January 2019 for finished goods, work-in-process and

direct materials are RM540,000, RM195,000 and RM90,000, respectively.

2. Utility, insurance, supplies and other expenses for factory and office are allocated

as below:

Factory Office

Utility expenses 40% 60%

Insurance expenses 50% 50%

Supplies expenses 20% 80%

Other expenses 10% 90%

REQUIRED:

(a) Prepare the Statement of Cost of Goods Manufactured for the year ended 31

December 2019.

(12 Marks)

(b) Prepare the Statement of Profit or Loss and Other Comprehensive Income for the

year ended 31 December 2019.

(8 Marks)