[Total : 25 marks] Q2. Madam Loui is the owner of Mama Bakery, a medium-scale bakery business in Taiwan. She has no fundamental knowledge in accounting, hence she recruited Anna to be the finance and administration manager of the enterprise to assist her on the manufacturing routines and the accounting reports matters. Mama Bakery closes its accounts on 31 December every year. Madam Loui purchased 4 new ovens for RM9,000 each on 1 September 2019 to catch up with the increased number of cookies production and recorded the ovens at the market price of RM9,900 each. The oven can bake up to 1,000 cookies per day. Each oven has an estimated useful life of 5 years with an annual depreciation rate of 10% on cost. Madam Loui personally donated 5 to 10 jars of cookies every month to the orphanage house near her residential area without recording the transactions for proper documentation purposes. Moreover, on 5 January 2020, Madam Loui hired 2 new workers for the packaging team and agreed to pay them a monthly salary of RM1,500. She recorded the transactions on the same day to avoid any omission later on. Although the sales of the bakery business increased rapidly, all receipts, invoices, vouchers and cheques were not properly recorded and kept by the cashiers. Madam Loui ignored the situations as she only relied on the software used by her bakery shop to record transactions. At the end of the year, the reported profit of Mama Bakery was RM12,000 and the sales earned by Mama Bakery was RM34,000. Besides, the expenses incurred to buy baking ingredients were RM23,000. Mama Bakery included previous year's revenue and expenses in current year's transactions. 5 FHBM1214 FINANCIAL ACCOUNTING Section A Q2. (Continued) (a) Based on the scenario above, identify and describe FIVE (5) relevant accounting concepts applicable to the transactions of Mama Bakery and explain how the transactions should be recorded correctly. (20 marks) (b) Mama Bakery disposed one of its ovens on 31 October 2020 for RM6,600 by cheque. Prepare the ledger account for the disposal of the oven. (5 marks) [Total: 25 marks]