Section A (40 Marks) 1. Internal users of accounting information include all of the following except, A. company officers. B. investors. C. marketing managers. D. production supervisors. 2. Which of the following events is not a business transaction? A. Investment of cash by the owner B. Hired employees C. Incurred utility expenses for the month D. Earned revenue for services provided 3. Cost of goods available for sale is computed by adding A. freight-in to net purchases. B. beginning inventory to net purchases. C. beginning inventory to purchases and freight-in. D. beginning inventory to cost of goods purchased. 4. Net sales is sales less A. sales discounts. B. sales returns. C. sales returns and allowances. D. sales discounts and sales returns and allowances. 5. Cempaka Sari Company purchased inventory from Pustaka Company. The shipping costs were RM400.00 and the terms of the shipment were FOB shipping point Cempaka would have the following entry regarding the shipping charges: A. There is no entry on Cempaka's books for this transaction. B. Freight Expense 400.00 Cash... 400.00 C. Freight-out.... 400.00 Cash...... 400.00 D. Merchandise Inventory 400.00 Cash..... 400.00 Use the following information for questions 6-11. Wawasan Gemilang's Bhd inventory records show the following data: Units Unit Cost Inventory, January 1 5,000 RM9.00 Purchases: June 18 4,500 8.00 November 8 3,000 7.00 A physical inventory on December 31 shows 2,000 units on hand. Wawasan Gemilang's sells the units for RM12.00 each. The company has an effective tax rate of 20%. Wawasan Gemilang' uses the periodic inventory method. & Under the FIFO method. the December 31 Inventory is valued at A RM14,000.00 BRM14, sono CAMIS, 00 D. RM18.00 7. What is the cost of goods available kesak? A. RM21.00 BRM.MIKELOO CRMS,COLLO D. RM100.000,00 8. Under the LIFO method. cost of goods soklis A. RMIO.500.00 B RM18,00 CRM4,00 D. RMK,00000 9. The weight lavere per unitis A. RM7.50 BRMO CRM16 D. RMS In the company es FIRO, what is the greaprofit for the period? A. RM2.000,00 BRMIQ,000.00 CRM21,00 D. RM4,00 IL What is the difference in taxes i LIFO rather than FIFO is used! A. RMSO00 additional anes B RM20.00 ux saving CRMA.COM ax savings D. RM4.000,00 additional taxes 12 The lower-d-ander market basis of valuing investering is an example of A comparability the cost principle. conservatism D. consistency 13 khe Company developed the following information about is investories in applying the Tower of cost or market LCM basis invaluing inventories: Muhe A RM110.000,00 RM120,000.00 80.000.00 76,000.00 C 160,000.00 162,000.00 if kha applies the LCM bess, the value of the inventory reported on the belance sheet would A. RMSL.000.00 BRM342.000,00 C RM346.000,00 D. RM2.000 14. Ekamata Sdn Bhd made an inventory count on December 31, 2019. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2019, the effects of this error are Assets Liabilities Owner's Equity A. overstated understated overstated B. understated no effect understated Coverstated no effect overstated D. overstated overstated understated 15. A factory machine was purchased for RM75,000.00 on January 1, 2018. It was estimated that it would have a RM15,000.00 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2018. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2018 would be A. RM7,500.00 B. RM12,000.00 C. RM15,000.00 D. RM6,000.00 16. Which of the following methods of computing depreciation is production based? A. Straight-line B. Declining-balance C. Units-of-activity D. None of these 17. The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is A. straight-line. B. units-of-activity. C. declining-balance. D. none of these. 18. A company sells a plant asset which originally cost RM180,000.00 for RM60,000.00 on December 31, 2019. The Accumulated Depreciation account had a balance of RM72,000.00 after the current year's depreciation of RM18,000.00 had been recorded. The company should recognize a A. RM120,000.00 loss on disposal. B. RM48,000.00 gain on disposal. C. RM48,000.00 loss on disposal. D. RM30,000.00 loss on disposal. 19. A truck costing RM110,000.00 was destroyed when its engine caught fire. At the date of the fire, the accumulated depreciation on the truck was RM50,000.00 An insurance check for RM125,000.00 was received based on the replacement cost of the truck. The entry to record the insurance proceeds and the disposition of the truck will include a A. Gain on Disposal of RM15,000.00 B. credit to the Truck account of RM60,000.00 C. credit to the Accumulated Depreciation account for RM50,000.00 D. Gain on Disposal of RM65,000.00 20. Given the following account balances at year end, compute the total intangible assets on the balance sheet of Anisha Enterprises. Cash RM1,500,000.00 Accounts Receivable 4,000,000.00 Trademarks 1,000,000.00 Goodwill 4,500,000.00 Research & Development Costs 2,000,000.00 A. RM11,500,000.00 B. RM7,500,000.00 C. RM5,500,000.00 D. RM9,500,000.00 Use the following information for questions 21-22. On October 1, Jay Ng's Carpet Service borrows RM250,000.00 from First National Bank on a 3-month, RM250,000.00, 8% note. 21. What entry must Jay Ng's Carpet Service make on December 31 before financial statements are prepared? A. Interest Payable.... 5,000.00 Interest Expense.. 5,000.00 B. Interest Expense...... 20,000.00 Interest Payable..... 20,000.00 C. Interest Expense....... 5,000.00 Interest Payable..... 5,000.00 D. Interest Expense...... 5,000.00 Notes Payable........ 5,000.00 22. The entry by Jay Ng's Carpet Service to record payment of the note and accrued interest on January 1 is A. Notes Payable... 255,000.00 Cash...... 255,000.00 B. Notes Payable.. .250,000.00 Interest Payable. 5,000.00 Cash. 255,000.00 C. Notes Payable.... ..250,000.00 Cash 255,000.00 23. The primary purpose of the statement of cash flows is to A. provide information about the investing and financing activities during a period. B. prove that revenues exceed expenses if there is a net income. C. provide information about the cash receipts and cash payments during a period. D. facilitate banking relationships. Use the following information for questions 24-25. Jus Delicious's Vegetable Market had the following transactions during 2019: 1. Issued RM25,000.00 of par value common stock for cash. 2. Repaid a 6 year note payable in the amount of RM11,000.00 3. Acquired land by issuing common stock of par value RM50,000.00 4. Declared and paid a cash dividend of RM1,000.00 5. Sold a long-term investment (cost RM3,000.00) for cash of RM3,000.00 6. Acquired an investment in IBM stock for cash of RM6,000.00 24. What is the net cash provided by financing activities? A. RM13,000.00 B. RM25,000.00 C. RM14,000.00 D. RM9,000.00 25. What is the net cash provided by investing activities? A. RM6,000.00 B. RM16,000.00 C. (RM3,000.00) D. RM3,000.00 26. The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease A. Stockholders' equity Assets Assets Liabilities C. Liabilities Stockholders' equity D. Liabilities Assets B. 27. Which one of the following events would not require a formal journal entry on a corporation's books? A. 2 for 1 stock split B. 100% stock dividend C. 2% stock dividend D. RM1 per share cash dividend 8 28. Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity A. Increase Decrease No change B. No change Increase Decrease C. Decrease Increase Decrease D. Decrease No change Increase 29. Angsana, Bhd. has 10,000 shares of 6%, RM100.00 par value, cumulative preferred stock and 100,000 shares of RM1 par value common stock outstanding at December 31, 2018. If the board of directors declares a RM50,000.00 dividend, the A. preferred shareholders will receive 1/10th of what the common shareholders will receive. B. preferred shareholders will receive the entire RM50,000.00 C. RM50,000.00 will be held as restricted retained eamings and paid out at some future date. D. preferred shareholders will receive RM25,000.00 and the common shareholders will receive RM25,000.00. 30. Laras, Bhd. has 2,000 shares of 6%, RM50.00 par value, cumulative preferred stock and 50,000 shares of RM1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a RM4,000.00 dividend in 2017. In 2018, RM20,000.00 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2018? Preferred Common A. RM12,000.00 RM8,000.00 B. RM10,000.00 RM10,000.00 C. RM8,000.00 RM12,000.00 D. RM6,000.00 RM14,000.00 31. On January 1, Bulan Corporation had 800,000 shares of RM10.00 par value common stock outstanding. On March 31, the company declared a 10% stock dividend. Market value of the stock was RM15/share. As a result of this event, A. Bulan's Paid-in Capital in Excess of Par Value account increased RM400,000.00. B. Bulan's total stockholders' equity was unaffected. C. Bulan's Retained Earnings account decreased RM1,200,000.00. D. All of the above. Use the following information for questions 3234. Cempaka County Bank agrees to lend Adam Brick Company RM200,000.00 on 1 January. Adam Brick Company signs a RM200,000.00, 8%, 9-month note. The entry made by Adam Brick Company on 1st January to record the proceeds and issuance of the note is 32. Section A (40 Marks) 1. Internal users of accounting information include all of the following except, A. company officers. B. investors. C. marketing managers. D. production supervisors. 2. Which of the following events is not a business transaction? A. Investment of cash by the owner B. Hired employees C. Incurred utility expenses for the month D. Earned revenue for services provided 3. Cost of goods available for sale is computed by adding A. freight-in to net purchases. B. beginning inventory to net purchases. C. beginning inventory to purchases and freight-in. D. beginning inventory to cost of goods purchased. 4. Net sales is sales less A. sales discounts. B. sales returns. C. sales returns and allowances. D. sales discounts and sales returns and allowances. 5. Cempaka Sari Company purchased inventory from Pustaka Company. The shipping costs were RM400.00 and the terms of the shipment were FOB shipping point Cempaka would have the following entry regarding the shipping charges: A. There is no entry on Cempaka's books for this transaction. B. Freight Expense 400.00 Cash... 400.00 C. Freight-out.... 400.00 Cash...... 400.00 D. Merchandise Inventory 400.00 Cash..... 400.00 Use the following information for questions 6-11. Wawasan Gemilang's Bhd inventory records show the following data: Units Unit Cost Inventory, January 1 5,000 RM9.00 Purchases: June 18 4,500 8.00 November 8 3,000 7.00 A physical inventory on December 31 shows 2,000 units on hand. Wawasan Gemilang's sells the units for RM12.00 each. The company has an effective tax rate of 20%. Wawasan Gemilang' uses the periodic inventory method. & Under the FIFO method. the December 31 Inventory is valued at A RM14,000.00 BRM14, sono CAMIS, 00 D. RM18.00 7. What is the cost of goods available kesak? A. RM21.00 BRM.MIKELOO CRMS,COLLO D. RM100.000,00 8. Under the LIFO method. cost of goods soklis A. RMIO.500.00 B RM18,00 CRM4,00 D. RMK,00000 9. The weight lavere per unitis A. RM7.50 BRMO CRM16 D. RMS In the company es FIRO, what is the greaprofit for the period? A. RM2.000,00 BRMIQ,000.00 CRM21,00 D. RM4,00 IL What is the difference in taxes i LIFO rather than FIFO is used! A. RMSO00 additional anes B RM20.00 ux saving CRMA.COM ax savings D. RM4.000,00 additional taxes 12 The lower-d-ander market basis of valuing investering is an example of A comparability the cost principle. conservatism D. consistency 13 khe Company developed the following information about is investories in applying the Tower of cost or market LCM basis invaluing inventories: Muhe A RM110.000,00 RM120,000.00 80.000.00 76,000.00 C 160,000.00 162,000.00 if kha applies the LCM bess, the value of the inventory reported on the belance sheet would A. RMSL.000.00 BRM342.000,00 C RM346.000,00 D. RM2.000 14. Ekamata Sdn Bhd made an inventory count on December 31, 2019. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2019, the effects of this error are Assets Liabilities Owner's Equity A. overstated understated overstated B. understated no effect understated Coverstated no effect overstated D. overstated overstated understated 15. A factory machine was purchased for RM75,000.00 on January 1, 2018. It was estimated that it would have a RM15,000.00 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2018. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2018 would be A. RM7,500.00 B. RM12,000.00 C. RM15,000.00 D. RM6,000.00 16. Which of the following methods of computing depreciation is production based? A. Straight-line B. Declining-balance C. Units-of-activity D. None of these 17. The depreciation method that applies a constant percentage to depreciable cost in calculating depreciation is A. straight-line. B. units-of-activity. C. declining-balance. D. none of these. 18. A company sells a plant asset which originally cost RM180,000.00 for RM60,000.00 on December 31, 2019. The Accumulated Depreciation account had a balance of RM72,000.00 after the current year's depreciation of RM18,000.00 had been recorded. The company should recognize a A. RM120,000.00 loss on disposal. B. RM48,000.00 gain on disposal. C. RM48,000.00 loss on disposal. D. RM30,000.00 loss on disposal. 19. A truck costing RM110,000.00 was destroyed when its engine caught fire. At the date of the fire, the accumulated depreciation on the truck was RM50,000.00 An insurance check for RM125,000.00 was received based on the replacement cost of the truck. The entry to record the insurance proceeds and the disposition of the truck will include a A. Gain on Disposal of RM15,000.00 B. credit to the Truck account of RM60,000.00 C. credit to the Accumulated Depreciation account for RM50,000.00 D. Gain on Disposal of RM65,000.00 20. Given the following account balances at year end, compute the total intangible assets on the balance sheet of Anisha Enterprises. Cash RM1,500,000.00 Accounts Receivable 4,000,000.00 Trademarks 1,000,000.00 Goodwill 4,500,000.00 Research & Development Costs 2,000,000.00 A. RM11,500,000.00 B. RM7,500,000.00 C. RM5,500,000.00 D. RM9,500,000.00 Use the following information for questions 21-22. On October 1, Jay Ng's Carpet Service borrows RM250,000.00 from First National Bank on a 3-month, RM250,000.00, 8% note. 21. What entry must Jay Ng's Carpet Service make on December 31 before financial statements are prepared? A. Interest Payable.... 5,000.00 Interest Expense.. 5,000.00 B. Interest Expense...... 20,000.00 Interest Payable..... 20,000.00 C. Interest Expense....... 5,000.00 Interest Payable..... 5,000.00 D. Interest Expense...... 5,000.00 Notes Payable........ 5,000.00 22. The entry by Jay Ng's Carpet Service to record payment of the note and accrued interest on January 1 is A. Notes Payable... 255,000.00 Cash...... 255,000.00 B. Notes Payable.. .250,000.00 Interest Payable. 5,000.00 Cash. 255,000.00 C. Notes Payable.... ..250,000.00 Cash 255,000.00 23. The primary purpose of the statement of cash flows is to A. provide information about the investing and financing activities during a period. B. prove that revenues exceed expenses if there is a net income. C. provide information about the cash receipts and cash payments during a period. D. facilitate banking relationships. Use the following information for questions 24-25. Jus Delicious's Vegetable Market had the following transactions during 2019: 1. Issued RM25,000.00 of par value common stock for cash. 2. Repaid a 6 year note payable in the amount of RM11,000.00 3. Acquired land by issuing common stock of par value RM50,000.00 4. Declared and paid a cash dividend of RM1,000.00 5. Sold a long-term investment (cost RM3,000.00) for cash of RM3,000.00 6. Acquired an investment in IBM stock for cash of RM6,000.00 24. What is the net cash provided by financing activities? A. RM13,000.00 B. RM25,000.00 C. RM14,000.00 D. RM9,000.00 25. What is the net cash provided by investing activities? A. RM6,000.00 B. RM16,000.00 C. (RM3,000.00) D. RM3,000.00 26. The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease A. Stockholders' equity Assets Assets Liabilities C. Liabilities Stockholders' equity D. Liabilities Assets B. 27. Which one of the following events would not require a formal journal entry on a corporation's books? A. 2 for 1 stock split B. 100% stock dividend C. 2% stock dividend D. RM1 per share cash dividend 8 28. Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity A. Increase Decrease No change B. No change Increase Decrease C. Decrease Increase Decrease D. Decrease No change Increase 29. Angsana, Bhd. has 10,000 shares of 6%, RM100.00 par value, cumulative preferred stock and 100,000 shares of RM1 par value common stock outstanding at December 31, 2018. If the board of directors declares a RM50,000.00 dividend, the A. preferred shareholders will receive 1/10th of what the common shareholders will receive. B. preferred shareholders will receive the entire RM50,000.00 C. RM50,000.00 will be held as restricted retained eamings and paid out at some future date. D. preferred shareholders will receive RM25,000.00 and the common shareholders will receive RM25,000.00. 30. Laras, Bhd. has 2,000 shares of 6%, RM50.00 par value, cumulative preferred stock and 50,000 shares of RM1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a RM4,000.00 dividend in 2017. In 2018, RM20,000.00 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2018? Preferred Common A. RM12,000.00 RM8,000.00 B. RM10,000.00 RM10,000.00 C. RM8,000.00 RM12,000.00 D. RM6,000.00 RM14,000.00 31. On January 1, Bulan Corporation had 800,000 shares of RM10.00 par value common stock outstanding. On March 31, the company declared a 10% stock dividend. Market value of the stock was RM15/share. As a result of this event, A. Bulan's Paid-in Capital in Excess of Par Value account increased RM400,000.00. B. Bulan's total stockholders' equity was unaffected. C. Bulan's Retained Earnings account decreased RM1,200,000.00. D. All of the above. Use the following information for questions 3234. Cempaka County Bank agrees to lend Adam Brick Company RM200,000.00 on 1 January. Adam Brick Company signs a RM200,000.00, 8%, 9-month note. The entry made by Adam Brick Company on 1st January to record the proceeds and issuance of the note is 32