requirement

QUESTION (30 MARKS) Techno Active Sdn Bhd is the manufacturing and selling computer and laptop accessories company. The current liability section for Techno Active Sdn Bhd as at 31 December 2018 is shown below. Statement of Financial Position As at 31 December 2018 Current Liabilities Notes Payable (1) Trade payables Salary Payables Utilities payable Interest Payable RM 125,000 78,000 15,000 4,500 2,970 During 2019, the following transactions related to liabilities occurred. On 1 February 2019, pay notes payable (1) RM125,000 together with the interest payable for the notes. The interest for the notes for the month on January 2019 is RM279. For the year 2019, TechnoActive pay trade payables amounted to RM175,390 by cheque. iii. Purchase of material on credit from trade supplier amounted to RM143,240. On 1 December 2019, the company receives advances RM25,000 by cheque from customer, l-pple. Techno Active requires to manufacture one special computer accessories for l-pple. During the year, the company pays RM2,300 for utilities payable. And by the end of the year RM2,570 utilities bill still not being recorded and paid. Techno Active paid all salary payable On 1 September 2019, the company receive RM75,000, 6%, 6 month notes payat from IndahBank. Sales for the year is RM739,700. This amount includes 5% sales tax payable to Custom Malaysia The sales for the year are subject to product warranties for 6 months and estimates that warranty costs will be 5% of sales. viii. ix. Required: a) Record the journals for the above liability transactions (15 marks) b) Record the adjustment for interest at the end of the year. (3 marks) c) Prepare the current liabilities section in Statement of Financial Position as at 31 December 2019 (6 marks) d) Assume that the company had unintentionally involve with an error by understating the liabilities for interest payable item. Explain the action should be taken to rectify this issue. (3 marks) e) Discuss the reason(s) for the company to accounts for its warranty