Question 1 _20 marks_

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```					Confidential                                                                AAD1023/July-Nov 2005

Question 1 (20 marks)
De Majoo started business on 1st July 2003. It involves in manufacturing of kids attire.
On 1st September 2002, the business purchased a machine.
Details of the machine are as follows

Cost (RM)                 Estimated Total Productions Estimated Scrap Value (RM)
150,000                   5,000,000 units               25,000

Actual productions of the machine are
1st Year (as at 30th June 2003)         300,000 units
nd                 th
2 Year (as at 30 June 2004)             560,000 units
3rd Year (as at 30th June 2005)         470,000 units

Required
Based on number of units produced
a) Calculate the depreciation cost per unit. (2 marks)
b) Prepare the following accounts for the year ended 30th June 2003,2004,2005.
i)        Depreciation of machine (6 marks)
ii)       Provision for depreciation of machine (6 marks)
c) Extract of the balance sheet showing the net book value of the machine as at the above
dates.(6 marks)

Question 2 (20 marks)
a) Trump, a retailer of stationery items has not kept a proper records based on double entry
system as he has little knowledge of bookkeeping procedures. However, the following
information was available despite the limited records of business transactions.

30th June 2004              30th June 2005
Stock                      26,000                      23,400
Bank                       15,400                      -

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Computer                    6,000                     -
Office Furniture            5,000                     -

Debtors                     12,350                    24,350
Creditors                   13,500                    13,500

During the year, he recorded the following information :

Cash receipts                        RM
Sales                                32,800
Total cash received from debtors     61,000

Cash payments                        RM
Sales Assistant’s wages              6,000
Purchased second hand vehicle        30,000
Sundry expenses                      2,600
Purchased of goods                   36,000
Telephone bills                      1,400
Payments to creditors                37,000

1.        Personal computer is to be depreciated at 25% per year and office equipment at 10%
per year.
2.        Accrued telephone bills and accrued insurance amounted to RM 250 and RM500
respectively.
Required
i) Calculate the total sales for the year (3 marks)
ii) Calculate the total purchases for the year (3 marks)

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iii) The Trading, Profit and Loss Account (Income Statement) for the year ended 30th June
2005. (8 marks)

b) Define the following errors
i)    Error of original entry (2 marks)
ii) Error of principal (2 marks)
iii) Error of omission (2 marks)

Question 3 (20 marks)
On 1st March 2003, Formula Sdn Bhd purchased a motor vehicle from Juara Finance Bhd on
hire purchase term. The hire purchase agreement states these additional conditions:

Cash Price                : RM 45,000
Deposit                   : RM 7,020
Installments              : 36 monthly installment of RM 1,200 each
1st Installment due       : 31st March 2003.
Interest allocation       : Straight line method
All payments were made on due dates. On 3rd September 2004, Formula Sdn. Bhd. decided to
terminate the agreement with Juara Finance Bhd . The final payment was paid on that date and
Juara Finance Bhd decided to allow a rebate of 15% on the finance charge. The company
prepares its accounts annually up to 31st December each year.
Required
a)        Calculate the hire purchase price (2 marks)
b)        Calculate the total interest on hire purchase (2 marks)
c)        Calculate the final payment upon termination of agreement (3 marks)
d)        In the books of the buyer prepare:
i) Motor Vehicle account (2 marks)
ii) Hire Purchase Creditor’s account (5 marks)
iii) Hire Purchase Interest account (2 marks)
e) Provide 2 reasons for seller charging interest under hire purchase sale. (4 marks)

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Question 4 (20 marks)
Following are the balances from the books of Alpha Sdn Bhd, a manufacturer of metal containers
as at 31st December 2004.
Debit (RM)      Credit(RM)

Stock, 1/1/04
Raw Material                              12,500
Finished Goods                             8,200

Drawings                                   1,000
Sales                                                   223,000
Capital                                                  58,800
Purchase of Raw Materials                 52,500
Carriage Inwards                           4,000
Factory Wages                             32,500
Office Salaries                           23,000
Indirect Material                          3,700
Power & Electricity                       14,000
General Expenses:
Factory                                    3,200
Office                                     7,000
Lighting                                   4,200
Rent                                      12,000
Insurance                                  2,000
Carriage Outwards                          2,500
Plant and Machinery (net book             72,000
value)
Motor Car (net book value)                40,000
Bank                                      45,000
Cash In Hand                               2,500
Debtors and Creditors                     25,400         20,000
Return Outwards                                           2,300
Loan From Bank, 10 years                                 65,000
373,200        373,200

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1. Stock as at 31st December 2004 :
Raw material            RM 8,900
Finished goods          RM 7,800

2. Depreciation for plant and machinery is at 10% and motor car is at 20% on reducing balance
method.
3. Insurance of RM 400 and rent of RM 2,000 have not been paid as at 31st December 2004.
4. The following expenses are to be apportioned accordingly
Factory            Office

Lighting               2/3                1/3
Rent                   ½                  ½
Insurance              ¾                  ¼

Required
Prepare the following for the year ended 31st December 2004
a) Manufacturing account ( 7 marks)
b) Trading Profit and Loss account (Income Statement) (7 marks)
c) Balance Sheet as at 31st December 2004. (6 marks)

Question 5 (20 marks)
a) Lia, Lily and Lina have been in partnership business for 3 years. Their profit sharing
ratio is 3: 2 : 2 respectively . For the year ended 30th June 2005, the net profit of their
business was RM36,500. The following information were also available

Lia             Lily               Lina
Drawings                                         2,500           3,400              1,200
Salary                                           4,500           -                  2,400
Balance of current account (1st July 2004)       7,800(Cr)       4,800(Cr)          4,200(Dr)

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Capital (1st July 2004)                      28,000         35,000           38,000
Interest on Capital                          2,800          3,500            3,800

Interest on drawings was at 7% per annum.
Required :
Prepare
i)         Profit and Loss Appropriation account for the year ended 30th June 2005 (7 marks)
ii)        Partner’s Current Account (in columnar form) (7 marks)
b) Define goodwill and give 2 reasons for valuing goodwill ( 3 marks)
c) Give 3 characteristics of a partnership. (3 marks)

End of Question Paper

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