QUESTION 1 Following trial balance relates to Anson Traders which was extracted at the close of business on 30 June 2021: Dr (RM) Cr (RM) Sales 230,100 Purchases 125,000 Land (freehold) 160,000 Buildings 80,000 Accumulated depreciation - Buildings 24,000 Equipment 65,000 Accumulated depreciation - Equipment 29.250 Furniture and fixtures 68,000 Accumulated depreciation - Furniture and fixtures 10,200 Opening inventory 10,000 Office maintenance expenses 1,950 Accounts receivables 7,500 Allowance for doubtful debts 500 Discount allowed/discount received 950 1,500 Return inwards/return outwards 3,600 2,400 Carriage inwards 4,300 Carriage outwards 6,050 Cash and bank 10,550 Long-term loan (Repayment 2026) 120,000 Accounts payable 6,950 Capital 160,000 Drawings 2,000 Salaries and wages 16,200 Sales commission expense 9,800 Advertising expense Interest expense 9,000 584,900 584,900 5,000 Page 2 of 7 Additional information at 30 June 2021: (i) Closing inventory was RM6,000. (ii) Analysis of accounts receivable under aging method showed that debts amounting to RM225 were not recoverable and were to be written off. The allowance for doubtful debts is to be maintained at 5%. (iii) Accrued interest on long-term loan amounted to RM3,000. (iv) Prepaid advertising expenses of RM450. (v) During the review of sales analysis, it was discovered that there was an advance payment of RM3,500 by one of the credit customers being recognised as sales earned for the current financial period. (vi) Office maintenance expenses of RM250 was wrongly taken up in the sales commission expenses. (vii) Ahsan took goods worth RM450 for his personal use was not recorded. (viii) Depreciation charge is provided as follows: Buildings - 2% using straight-line method Equipment - 15% using straight-line method Furniture and fixtures - 10% using reducing balance method (All amounts are to be rounded up to the nearest Ringgit) . Required Prepare the following for the financial period ended 30 June 2021: (a) Statement of profit or loss (b) Statement of financial position (14 marks) (11 marks) [Total 25 Marks] QUESTION 2 The following balances were extracted from the books of Li Chow on 1 May 2021: RM Sales ledger control 172,140 (Dr) Purchase ledger control 108,150 (Cr) Allowance for doubtful debts 850 In May 2021, the following transactions were made: Debit balance on sales ledger transferred to purchases ledger Cash purchases Cash sales Credit purchases Credit sales Returns outwards to credit suppliers Returns inwards from credit customers Payments to credit suppliers Receipts from credit customers Accounts receivable's cheque dishonoured Legal fees for debt collection charged to customer's account Discounts allowed RM 6,600 14,550 25,340 128,860 179,400 5,060 2,120 108,720 169,820 2,400 400 1,740 Page 3 of 7 Discounts received Bad debts written off Allowance for doubtful debts Interest charged to accounts receivable 1,200 630 578 4,363 The allowance for doubtful debts account is to be provided at 1% of the balance of accounts receivable as at 31 May 2021. Required Prepare the following as at 31 May 2021: (a) Purchases ledger control account. (8 marks) (b) Sales ledger control account. (12 marks) (c) A statement of financial position extract to show accounts receivable, accounts payable and working capital. (3 marks) (d) Calculate the amount of doubtful debts to be charged to profit or loss. Indicate whether it is increase/decrease and debit/credit. (2 marks) [Total 25 Marks] QUESTION 3 PART A Donna records her bank and cash transactions in a 3-column Cash Book. On 1 August 2021, she had a cash balance of RM800 and a bank overdraft of RM600. The following transactions took place during August 2021: Date Transaction RM 1 Received cheque from Jim in full settlement of his balance after 2.000 deducting 2% cash discount (All amounts are pre-discount). 2 Donna withdrew cash for personal use. 500 3 Sold goods for cash RM1,100. 1,100 8 Paid cash into bank for business use. 800 9 Paid office rental by cheque for month of August 2021. 600 13 Paid by cheque to Elisa in full settlement of a debt after deducting 2% 1,950 cash discount (All amounts are pre-discount). 20 Received a cheque from Gilbert, one of the employees who borrowed the 2,000 money last month for his mother's medical expenses. 21 Made cash sales which was paid straight into the bank 500 22 Received a cheque from Tom in full settlement of his balance after 1,100 deducting cash discount of 2% (All amounts are pre-discount). 25 Purchased stationery by cash. 40 28 Issued cheque to Christine in full settlement of her balance after 100 deducting cash discount of 3% (All amounts are pre-discount). 30 Paid salaries by cheque. 12,000 30 Issued cheque to Johnny in full settlement of his balance after deducting 1.500 cash discount of 3% (All amounts are pre-discount). Donna has successfully arranged additional overdraft facility of RM20,000 with the bank for the working capital. Page 4 of 7 Required Write up the three-column cash book of Donna for the month of August 2021. (15 marks) Basis Rate PART B Andrew Enterprise has the following details of machinery: Date of Cost (RM) Depreciation purchase 1 January 2018 95,000 Reducing balance method 20% p.a. Month to month During the year of 2020, Andrew Enterpise purchased a higher capacity machine as the existing one has much lower capacity: Cost (RM) Installation cost Date of purchase (RM) 85,300 14,700 8 July On 31 December 2020, the machinery which was purchase in 2018 is disposed for RM42,000 for cash. Required Prepare the following accounts for the financial period ended 31 December 2020: a) Machinery accounts (2 marks) b) Accumulated depreciation accounts (2 marks) c) Disposal of motor vehicle accounts (3 marks) d) List TWO (2) reasons why depreciation is provided to assets. (3 marks) (Total Part B 10 marks) [Total 25 marks] QUESTION 4 Syed Sdn Bhd uses material AB for production of the finished goods. The following information on material AB is available as follows: Opening stock as at 1 March is at 300 kgs at RM 12.50 per kg. Date Purchases Issues March 4 400 kgs at RM 13.50 per kg March 5 March 6 240 kgs March 11 150 kgs@ RM 14.00 per kg March 18 March 20 March 25 150 kgs @RM 15.50 per kg. March 29 150 kgs 100 kgs 130 kgs 120 kgs Page 5 of 7 Required a) Calculate the cost of goods sold and the closing balance for the month of March by using the following methods: (i) First in first out (ii) Last in first out (iii) Weighted average (17 marks) b) Given the selling price at RM30.00 per kg, calculate the gross profit under the three methods. Indicate which method will produce the lowest gross profit if there is a rising purchase price. (4 marks) c) Discuss the differences between perpetual and periodic inventory. (4 marks) (Total 25 marks)