Proposed Questions (Set a)-Terkini

8/3/2019 Proposed Questions (Set a)-Terkini

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PROPOSED QUESTIONS SET A

QUESTION 1

Serimaju Consulting Company organized as corporation on 18 January 2011 and

engaged in the following transactions during its first two weeks of operation:

18

JanuaryIssued share in exchange for RM30,000 cash

22

JanuaryBorrowed RM20,000 from CIMB bank by issuing a note payable.

23

JanuaryPaid RM100 for a media advertisement aired on 24 January

25

JanuaryProvided RM1,000 of services to KPM Melaka for cash.

26

JanuaryProvided RM2,000 of services to KPM Beranang on account

31

January

Collected RM800 cash from KPM Beranang for the services provided on

26 JanuaryREQUIRED:

a) Record or journalize each of these transactions. [ 12

marks ]

Solution Q1 (a)

DATE PARTICULAR DEBIT CREDIT

18-Jan

Cash 30,000

Shares

30,000

22-Jan Bank 20,000

Note Payable

20,000

23-Jan

Advertisement

100

Cash

100

25-Jan Cash 1,000

Revenue

1,000

26-Jan Accounts Receivable 2,000


2/20

Revenue

2,000

31-Jan Cash 800

Accounts Receivable

800

53,900 53,900

b) Prepare all the relevant accounts for these transaction. [ 8

marks]

1 (b)Cash

18-Jan Cash

30,000.00

23-Jan Advertising Expense 100

25-Jan Revenue

1,000.00

31-Jan

AccountReceivable

800.00 Balance c/f 31,700.00

Total31,800.0

0 Total31,800.0

0

Bank22-Jan Note Payable

20,000.00 Balance c/f 20,000.00

Total20,000.0

0 Total20,000.0

0

Advertising Expense23-Jan

AdvertisingExpense

100.00 Balance c/f

100.00

Total100.0

0 Total100.0

0

Account Receivable26-Jan Revenue

2,000.00

31-Jan Cash

800.00

Balance c/f 1,200.00

Total 2,000.0 Total 2,000.0


3/20

0 0

Shares Capital

Balancec/f

30,000.00 18-Jan Cash 30,000.00

Total30,000.0

0 Total 30,000.00

Note Payable22-Jan

Balancec/f

20,000.00 Bank 20,000.00

Total20,000.0

0 Total 20,000.00

Revenue

Balancec/f 3,000.00 25-Jan Cash 1,000.00

26-JanAccountReceivable 2,000.00

Total3,000.0

0 Total 3,000.00

16 x = 8 marks

QUESTION 2

Sulam Tiri Sdn Bhd is a well known company for selling traditional clothes to the

worldwide market. At 31 December 2010, the companys inventory amounted

RM440,000. During the first week in January 2011, Sulam Tiri Sdn Bhd made only

one purchase and one sale as the following transactions :

DATE TRANSACTION

3/1/2011

Sold 4 dozens of traditional clothes to Kirana Couture for

RM200,000 cash. The cloths consist of 7 different design,

which had a total cost to Sulam Tiri Sdn Bhd of RM112,000.


4/20

7/1/2011

Purchased two design of 1 Malaysia batik and four design of

Sulaman batik from Kencana Dewi Batik Sdn Bhd. The total

cost of this purchase amounted to RM100,000; terms 2/10,

n/30.

Sulam Tiri Sdn Bhd records purchases of goods at net cost. The company has full

time accounting personnel and uses a manual accounting system.

REQUIRED:

a) Briefly describe the operating cycle of merchandising company. [ 2

marks ]

Solution Q2

a.) The operating cycle of a merchandising company consist of purchasing goods, selling

that goods to customers and collecting the sales proceeds from these customers. In

the process, the business converts cash into inventory, the inventory into accounts

receivable and the account receivable into cash.

2 x 1 = 2 marks

b) Prepare journal entries to record these transactions, assuming that Sulam Tiri

uses aperpetual inventory system. [ 6

marks ]

Journal entries using perpetual inventory system:

Date Transaction Debit (RM) Credit (RM)

3/1/2011 Cash

Sales

(sold 4 dozen of traditional clothes to KiranaCouture)

200,000

200,000

3/1/2011 Cost of goods sold

Inventory

(To record cost of goods sold)

112,000

112,000

7/1/2011 Inventory

Account Payable (Kencana Dewi Batik)

98,000

98,000


5/20

(Purchased of goods. Term 2/10, n/30)

12 x = 6 marks

c) Compute the balance in the Inventory control account at 7 January. [ 2

marks ]

Balance inventory = (RM440,000 RM112,000) + RM98,000 = RM426,000

4 x = 2 marks

d) Prepare journal entries to record these transactions, assuming that Sulam Tiri

uses aperiodic inventory system. [ 4 marks ]

Journal entries using periodic inventory system:

Date Transaction Debit (RM) Credit (RM)

3/1/2011 Cash

Sales

(sold 4 dozen of traditional clothes to KiranaCouture)

200,000

200,000

7/1/2011 Purchases

Account Payable (Kencana Dewi Batik)

(Purchased of goods. Term 2/10, n/30)

98,000

98,000

8 x = 4 marks

e) Cost of goods sold using periodic system:

Inventory at 1 January RM440,000

Add: Purchases 98,000

Cost of goods available for sale RM538,000

Less: Inventory at 7 January 426,000

Cost of goods sold RM112,000

4 x = 2 marks


6/20

f) Compute the cost of goods sold for the first week of January, by using

periodic system.

[ 2 marks ]

Cost of goods sold using periodic system:

Inventory at 1 January RM440,000

Add: Purchases 98,000

Cost of goods available for sale RM538,000

Less: Inventory at 7 January 426,000

Cost of goods sold RM112,000

4 x = 2 marks

g) Calculate the gross profit margin based on sales transaction on 3/1/2011.

[ 4 marks ]

Gross profit margin based on sales transaction on 3/1/2011:

Gross profit = Sales Cost of Goods sold

= RM200,000 RM112,000

= RM88,000

Gross profit margin = Gross profit /sales

= RM88,000 / 200000

= 44% 4 x 1 = 4 marks

(Total marks = 20 marks)

QUESTION 3

Part A

The shareholders equity of Embassy Bhd as at 31 December 2009, is as follows:-

Shareholders' equity:RM

40,000 ordinary shares at RM10 par 400,000

Share Premium 200,000

Total issued and paid capital 600,000

Retained earnings 1,700,000


7/20

Total shareholders' equity 2,300,000

Transactions affecting shareholders equity during 2010 are as follows:-

1 Apr The company purchased 2,000 of its ordinary shares from the open market at

RM37 per share

1 July The company reissued 1,000 treasury shares at RM48 per share.

1 July The company issued for cash 20,000 of previously unissued RM8 par value

ordinary shares at a price of RM47 per share.

1 Dec A cash dividend of RM1 per share was declared, payable on 30 December, to

shareholders of record at 14 December.

The profit for the year ended 31 December 2010 amounted to

RM173,000

REQUIRED:

a) Prepare the journal entries to record the transactions affecting shareholders equity

that took place during the year. [14

marks]

Solution Q3 part A

Date Dr Cr

1-Apr Treasury shares74,000

Bank74,000

1-Jul Bank48,000

Treasury shares37,000

Share Premium11,000

1-Jul Bank940,000

Ordinary shares160,000

Share Premium780,000

1-Dec Dividends59,000


8/20

Dividends payable59,000

Retained earnings69,000

Dividends

69,000

Income Summary173,000

Retained earnings173,000

28 x = 14

marks

b) Determine the earnings per share. [ 2

marks]

EPS = 173,000 / 59,000 = RM2.93 2 x 1 marks = 2 marks

Part B

The shareholders equity section of Primadana Bhds balance sheet appears as

follows:-

Shareholders' equity: RM RM8% preference shares, RM100 par value 12,000,000

Ordinary shares, RM5 par value 14,000,000

Share premium:

Preference shares 360,000

Ordinary shares 30,800,000 31,160,000

Retained earnings 2,680,000

Total shareholders' equity 59,840,000


9/20

REQUIRED:-

On the basis of this information, answer the following questions and show any

necessary supporting computations:

a. How many preference shares have been issued? [ 2

marks]

Solution Q3 part B

a.) Preference shares issued = RM12,000,000 / RM100 = 120,000 shares

2 x 1 marks = 2 marks

b. What is the total annual dividend requirement on the outstanding preference

shares?

[ 2 marks]

Total : 20 marks

Preference shares annual dividend = RM12,000,000 x 8% = RM960,000

2 x 1 marks = 2 marks

(Total marks = 20 marks)

QUESTION 4

Beranang Sdn Bhd adjust it accounts every month. Below is the companys year-

end unadjustedtrial balance dated 31 December 2010. (Bear in mind the adjusting

entries already have been made for the first 11 month of 2010, but have not beenmade for December).


10/20

Other information:

1. On 1 December the company signed a new rental agreement and paid three

months rent in advance at a rate of RM2,100 per month. This advanced

payment was debited to the Prepaid Office Rent account.

2. Dues and subscriptions expiring during December amounted to RM50.

Beranang Sdn Bhd

Unadjusted Trail Balance

31 December 2010

RM RM

Cash 49,100Consulting fees receivable 23,400

Prepaid Office rent 6,300

Prepaid dues and subscriptions 300

Supplies 600

Equipment 36,000

Accumulated depreciation : equipment 10,200

Notes payable 5,000

Income taxes payable 12,000

Unarned consulting fees 5,950Share capital 30,000

Retained earnings 32,700

Dividends 60,000

Consulting fees earned 257,180

Salareis expense 88,820

Telephone expense 2,550

Rent expense 22,000

Income Tax expense 51,000

Dues and subscriptions expense 560

Supplies expense 1,600Depreciation expense: equipment 6,600

Miscellaneouns expense 4,200

353,030 353,030


11/20

3. An estimate of supplies on hand was made at 31st December; the estimated

cost of the unused supplies was RM450.

4. The useful life of the equipment has been estimated at 5 years (60 months)

from date of acquisition.

5. Accrued interest on Notes Payable amounted to RM100 at year-end. (Set up

accounts for Interest Expense and for Interest Payable).

6. Beranang Sdn Bhd valued at RM2,850 were rendered during December to

clients who had made payment in advance.

7. It is the custom of the firm to bill clients only when consulting work is

completed or, in the case of prolonged engagements, at monthly intervals.

At 31 December, consulting services valued at RM11,000 had been rendered

to clients but not yet billed. No advanced payment has been received from

this clients.

8. Salaries earned by employees but not paid as of 31 December amount to

RM1,700.

9. Income taxes expense for the year is estimated at RM56,000 Of this amount,

RM 51,000 has been recognized as expense in prior months, and RM39,000

has been paid to tax authorities. The company plans to pay RM17,000

remainder of its income tax liability on 15 January.


12/20

REQUIRED:

a) Prepare the necessary adjusting journal entries on 31 December 2010. [10

marks]

Solution Q4

a)

DateAccount Titles andExplanation RM RM

31/12/2010

1. Rent expense2,1

00

Prepaid Office rent2,

100 (Rent expense for December

2010)

2.Dues and subscriptionsexpense

50

Prepaid dues andsubscriptions

50

(Dues and subscriptions expense for December 2010)

3. Supplies expense1

50

Supplies150

(Supplies used during December 2010)

4.Depreciation expense:equipment

600

Accumulated depreciation :equipment

600

(Depreciation expense: equipment for December 2010 (RM36,000/60 mth)

5. Interest Expense1

00

Interest Payable100

(Interest accrued on notes payable in December 2010)

6. Unearned Consulting fees2,8

50

Consulting fees Earned2,

850

(Consulting services performed for Clients in December 2010

who paid in advance)


13/20

7. Consulting fees Receivable11,0

00

Consulting fees earned11,0

00(Consulting services performed in December for which billings

havenot been made nor payments received)

8. Salaries Expense1,7

00

Salaries payable1,

700(Salaries accrued in December but not yetpaid)

9. Income Taxes Expense5,0

00

Income Taxes Payable 5,000(Estimated income taxes accrued on income inDecember)

36/36 x 10 = 10 marks


14/20

b) Determine the amounts to be reported in the companys year-end adjusted

trail balance for each of the following accounts;

Consulting Fees Earned Dues and Subscriptions Expenses

Salaries Expense Depreciation Expenses: Equipment

Telephone Expenses Miscellaneous Expenses

Rent Expense Interest Expenses

Supplies Expense Income Taxes Expense

[ 7 marks]

b)

Unadjusted + Adjustment = Adjusted Trial Balance

Consulting Fees

Earned

257,180 (6)

2,8

50

(7)11,0

00271

,030

Salaries Expense88,820 (8)

1,700

90,520

Telephone Expense2,550 none 2,550

Rent Expense22,000 (1)

2,100

24,100

Supplies Expense1,600 (3)

150 1,750

Dues and Subscriptions

Expense

560 (2) 50 610 Depreciation Expense :Equipment

6,600 (4)

600 7,200

Miscellaneous Expense4,200 none 4,200

Interest Expense None (5)1

00 100

Income Taxes Expense51,000 (9)

5,000

56,000

21 x 1/3 = 7 marks


15/20

c) Determine the companys profit for the year ended 31 December 2010.

[ 3 marks]

Company Profit

Consulting Fees Earned 271,030

Less:Salaries Expense 90,520

Telephone Expense 2,550

Rent Expense 24,100

Supplies Expense 1,750

Dues and Subscriptions Expense 610

Depreciation Expense : Equipment 7,200

Miscellaneous Expense 4,200

Interest Expense 100 Income Taxes Expense 56,000 (187,030)

Profit 84,000

12 x 1/4 = 3 marks

d) (Total marks = 20 marks)


16/20

QUESTION 5

Hafiz Consulting Sdn Bhd performs adjusting entries every month, but closes itaccounts only at year end. The companys year end adjusted trial balance dated 31

December 2010, was:

Hafiz Consulting Sdn Bhd

Adjusted Trial Balance

31 December 2010 RM RM

Cash 91,100Accounts Receivable 4,500

Supplies 300Equipment 12,000Accumulated Depreciation: Equipment 5,000Accounts payable 1,500Income tax payable 3,500Share Capital 25,000Retained Earnings 45,000Dividends 2,000Consulting revenue earned 96,000Salary expense 52,000Supply expense 1,200Advertising expense 300

Depreciation 1,000Income tax expense 11,600

REQUIRED:

a. Prepare an Income Statement and Statement of Changes in equity for year

ended 31 December 2010. Also prepare the companys Balance Sheet dated

31 December 2010. Does the company appear to be liquid? Defend your

answer.

[20 marks]


17/20

Solution Q5

a.)


Income Statement

for year ended 31 December 2010

Revenue:

96,000.0

0

Operating expenses:

- salary52,000.0

0

- supply1,200.0

0

- advertising300.0

0

- depreciation1,000.0

0 54,500.0

0

Profit before tax41,500.0

0

- income tax11,600.0

0

Profit for the year29,900.0

0

7 x 1 marks each =7 marks


18/20


Statement of Changes in Equity


Share capital Retained Earnings

Balance, 1 January 2010 25,000.00 45,000.00

Profit for the year 29,900.00

Dividend (2,000.00)


19/20

Balance, 31 Dicember2010

25,000.00

72,900.00

7 x 1 mark each =7 marks


Balance Sheet


Assets

Cash91,100.0

0

Account Receivable

4,500.0

0

Supplies300.

00

Equipment12,000.0

0

Less: depreciation(5,000.0

0) 7,000.0

0

Total assets102,900.

00

Liabilities & Equity

Liabilities

Account Payable1,500.0

0

Tax Payable3,500.0

0

Total liabilities5,000

.00

Equity

Retained Earning72,900.0

0

Share capital25,000.0

0

Total equity:97,900

.00


20/20

Total Liabilities &Equities

102,900.00

10 /10x 6 = 6 marks[Total = 20 marks]

Proposed Questions (Set a)-Terkini

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