QUESTION 2 (25 MARKS) Honey Gold Supplies (HGS) is a distributor of bottled Persian honey. HGS practices periodic inventory system for recording the inventories. The trial balance as at 31 December 2019 for the company shows as below: Honey Gold Supplies (HGS) Trial Balance as at 31 December 2019 Credit(RM) Debit (RM) 69,445 21,000 26,000 Account Name Cash Accounts Receivable Equipment Accounts Payable Capital Sales Revenue Inventories Purchase Sales Discount Advertising Expense Ending Stocks Purchase Discount 23,500 54,255 93,690 520 44,980 700 2,000 7,500 700 172,145 162,145 As newly hired accountant which appointed in February 2020, you identified the following errors. i. Transportation in to bring the stocks of bottled Persian honey RM1,532 was paid by cash. It was recorded as motor vehicle (debit) RM1,532 and cash (credit) RM1,532 ii. A purchase of inventories RM520 by cash was debited to Inventories Account for RM520 and credited to cash RM520. iii. A collection from Accounts Receivable for RM210 was debited to cash account and credited to Accounts Payable. iv. Sales return RM380 from credit customer was not recorded due to missing document. The document founded in February 2020. v. A sales discount RM35 was wrongly debited to Accounts Receivable RM 35 and credited to Purchase Discount account RM35. vi. Depreciation of equipment, RM2,600 was not recorded. Required: As financial statement needs to show true and fair information, it becomes your responsibilities to make corrections of the above errors. You are required to prepare: a) journal entries to correct the errors. (14 marks) (CLO3:PLO4/PL07:04) b) Identify ANY TWO (2) possibilities the reasons why the above errors occur. (2 marks) (CLO3:PLO4/PL07:C4) c) The net income for HGS for December 2019 was RM33,690. Prepare the Statement of Corrected Net Profit for HGS. (6 marks) (CLO3:PL04/PL07:C4) d) Suggest TWO (2) possible ways to avoid error from happen when preparing financial statement (3 marks) (CLO3:PLO4/PL07:04) QUESTION 2 (25 MARKS) Honey Gold Supplies (HGS) is a distributor of bottled Persian honey. HGS practices periodic inventory system for recording the inventories. The trial balance as at 31 December 2019 for the company shows as below: Honey Gold Supplies (HGS) Trial Balance as at 31 December 2019 Credit(RM) Debit (RM) 69,445 21,000 26,000 Account Name Cash Accounts Receivable Equipment Accounts Payable Capital Sales Revenue Inventories Purchase Sales Discount Advertising Expense Ending Stocks Purchase Discount 23,500 54,255 93,690 520 44,980 700 2,000 7,500 700 172,145 162,145 As newly hired accountant which appointed in February 2020, you identified the following errors. i. Transportation in to bring the stocks of bottled Persian honey RM1,532 was paid by cash. It was recorded as motor vehicle (debit) RM1,532 and cash (credit) RM1,532 ii. A purchase of inventories RM520 by cash was debited to Inventories Account for RM520 and credited to cash RM520. iii. A collection from Accounts Receivable for RM210 was debited to cash account and credited to Accounts Payable. iv. Sales return RM380 from credit customer was not recorded due to missing document. The document founded in February 2020. v. A sales discount RM35 was wrongly debited to Accounts Receivable RM 35 and credited to Purchase Discount account RM35. vi. Depreciation of equipment, RM2,600 was not recorded. Required: As financial statement needs to show true and fair information, it becomes your responsibilities to make corrections of the above errors. You are required to prepare: a) journal entries to correct the errors. (14 marks) (CLO3:PLO4/PL07:04) b) Identify ANY TWO (2) possibilities the reasons why the above errors occur. (2 marks) (CLO3:PLO4/PL07:C4) c) The net income for HGS for December 2019 was RM33,690. Prepare the Statement of Corrected Net Profit for HGS. (6 marks) (CLO3:PL04/PL07:C4) d) Suggest TWO (2) possible ways to avoid error from happen when preparing financial statement (3 marks) (CLO3:PLO4/PL07:04)
