SUGGESTED ANSWER PSPM AA015 – 2020/2021

QUESTION 1 [20 marks]

(a) (i) Bank Reconciliation Statement

Sutera Enterprise
Bank Reconciliation Statement
as at 31st March 2020
ITEM RM RM
Cash Balance Per Bank Statement 14,685
Add : Deposit In Transit
Jamil 1,200
Abdullah 1,800 3,000
17,685
Deduct : Outstanding Cheques
Jaya Enterprise 551103 320
Marwan Enterprise 551105 470 (790)
Adjusted Cash Balance Per bank 16,895

Cash Balance Per cash book 18,350

Add : Hana (Credit Transfer) 1,100
19,450
Deduct : Media Corp. (Standing Order) 45
Bank Charges or Bank Service Charges 32
Accounts Receivable error (420 – 240) 180
Hasan – NSF 2,300 (2,555)
Adjusted Cash Balance Per cash book 16,895

(ii) Journal entries.

Date Accounts dr cr
Mar.31 dr. Bank 1,100
cr. Accounts Receivable – Hana 1,100

dr. Accounts Payable – Media Corp 45

Bank Charges/Bank Service Charges 32
Accounts Receivable – Annie 180
Accounts Receivable – Hasan 2,300
cr. Bank 2,555

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(b) (i) Journals
Date Accounts dr cr
1. dr. Cash or Bank 220,000
Accounts Receivable 140,000
cr. Sales 360,000

2. dr. Allowance for Doubtful Debts 750

cr. Accounts Receivable – Shukri 750

3. dr. Accounts Receivable – Jana 1,200

cr. Allowance for Doubtful Debts 1,200

dr. Cash 1,200

cr. Accounts Receivable – Jana 1,200

(ii) Allowance for Doubtful Debts account.

Allowance for Doubtful Debts
RM RM
Accounts Receivable 750 Balance b/f 4,200
Accounts Receivable 1,200
Balance (2% x *349,250) c/f 6,985 Bad Debts Expense 2,335
7,735 7,735

*(210,000 + 140,000 – 750 + 1,200 – 1,200)

(iii) Adjustment entry.

Date Accounts dr cr
Aug. 31 dr. Bad Debts Expense 2,335
cr. Allowance for Doubtful Debts 2,335

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QUESTION 2 [20 marks]

(a) Journal entry

Date Accounts dr cr
June 7 dr. Inventory 10,000
cr. Accounts Payable – Barokah Enterprise 10,000

10 dr. Accounts Payable – Barokah Enterprise 200

cr. Inventory 200

20 dr. Cost of Goods Sold 1,900

cr. Inventory 1,900

dr. Cash 2,500

cr. Sales 2,500

(b) (i) Calculate the ending inventory units and the on 30 September 2020 using First-in, First-
out method on Periodical Inventory System for Manja Enterprise.

Beginning Inventory 100

(+) Purchases (200 + 160 + 140 + 175) 675
(-) Sales (220 + 200 + 100 + 50) (570)
Ending Inventory unit 205

(ii) Calculate the value of the ending inventory (FIFO method) for September 2020.

RM
th
Sept 11 purchase (RM10.20 x 30 units) 306
(+) Sept 23rd purchase (RM10.00 x 175 units) 1,750
Ending Inventory 2,056

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(ii) Calculate the cost of goods sold for September 2020

(RM)
Beginning Inventory (RM11.00 x 100) 1,100
Sept 3rd purchases (RM10.80 x 200) 2,160
Sept 10th purchase (RM10.60 x 160) 1,696
Sept 11th purchase (RM10.20 x 140) 1,428
Sept 23rd purchase (RM10.00 x 175) 1,750
Cost available for sale 8,134
(-) Cost of ending inventory (2,056)
Cost of goods sold 6,078

(iv) Calculate the gross profit for September 2020.

RM
Sales (RM18.50 x 570) 10,545
(-) Cost of goods sold (6,078)
Gross profit 4,467

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QUESTION 3 [20 marks]

a.
(i) To record depreciation expense of the machine for 2019 (monthly basis, straight-line
method)

Date Accounts Debit Credit

(RM) (RM)
2019
Dec 31 dr. Depreciation Expense – Machine 1,150*
cr. Accumulated Depreciation – Machine 1,150

Calculation*
RM
Machine A (RM7,400 – RM1,400)/6 1,000
Machine B [(RM8,000 – RM2,000)/10) x 3/12 150
Total depreciation expense 1,150*

(ii) To record depreciation expense of the equipment for 2019 (yearly basis, reducing-balance
method)

Date Accounts Debit Credit

(RM) (RM)
2019
Dec 31 dr. Depreciation Expense – Equipment 990*
cr. Accumulated Depreciation – Equipment 990

Calculation (Equipment C : Cost RM10,000)

Year Depreciation Expense AD BV
2017 10,000 x 10% = 1,000 1,000 9,000
2018 9,000 x 10% = 900 1,900 8,100
2019 8,100 x 10% = 810 2,710 7,290

Calculation (Equipment D : Cost RM2,000)

Year Depreciation Expense AD BV
2018 2,000 x 10% = 200 200 1,800
2019 1,800 x 10% = 180 380 1,620

*Total depreciation expense 2019 = RM810 + RM180 = RM990*

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b. Equipment DE & AD account

Depreciation Expense – Equipment

2019 RM 2019 RM
Dec Accumulated Depreciation 990 Dec Statement of Profit or 990
31 – Equipment 31 Loss
990 990

Accumulated Depreciation – Equipment

2019 RM 2019 RM
Jan 1 Balance b/f (1,900 + 200) 2,100
Dec Balance c/f 3,090 Dec Depreciation Expense 990
31 31 – Equipment
3,090 3,090

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QUESTION 4 [25 marks]

a. (i) to record the receipt of mortgage

Date Particulars Dt (RM) Cr (RM)

2019
April 1 Bank 175,000
Mortgage Payable 175,000

(ii) Interest expense and reduction of principal for the first month
Interest expense Reduction of
Monthly Outstanding
Month 175,000 x 7.5% outstanding
installment (A) balance
x 1/12 (B) balance (A – B)
Principal 175,000

1 1,622.28 1,093.75 528.53 174,471.47

(iii) To record the first monthly instalment payment

Date Particulars Dt (RM) Cr (RM)

2019
May 1 Interest Expense 1,093.75
Mortgage Payable 528.53
Bank 1,622.28

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b. (i) Capital on 31st December 2018
Assets:
Equipment RM13,500
Motor Vehicle 15,000
Inventory 3,750
Prepaid Insurance 320
Accounts Receivable 4,230
Bank 1,970
Total RM38,770
(-) Liabilities:
Accrued Misc. Expense RM220
Accounts Payable 2,850
Total (3,070)
Capital on 31st December 2018 RM35,700

(ii) Capital on 31st December 2019

Assets:
Equipment RM13,500
- Accumulated Depreciation – Equipment (2,700)* RM10,800
Motor Vehicle 35,000
- Accumulated Depreciation – Motor Vehicle (2,500)** 32,500
Inventory 4,410
Prepaid Insurance 460
Accounts Receivable (4,870 – 300) 4,570
Bank 2,540
Total RM55,280
(-) Liabilities
Accrued Utilities Expense RM90
Accrued Misc. Expense 160
Accounts Payable 3,190
Total (3,440)
Capital on 31st December 2019 RM51,840
*13,500 x 20%
**(15,000 x 10%) + (20,000 x 10% x 6/12)

(iii)Profit for the year 2019

Ending capital RM51,840
+ Drawings (5,200 + 270) 5,470
57,310
- Additional Capital (35,000 – 15,000) (20,000)
- Opening capital (35,700)
Net Profit RM1,610

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(iv) Statement of Financial Position as at 31st December 2019

Perniagaan Othman
Statement of Financial Position
As at 31st December 2019
RM RM
Non-Current Assets
Equipment 13,500
- Accumulated Depreciation – Equipment (2,700) 10,800
Motor Vehicle 35,000
- Accumulated Depreciation – Motor Vehicle (2,500) 32,500
Total Non-Current Assets 43,300
Current Assets
Bank 2,540
Accounts Receivable (4,870 – 300) 4,570
Inventory 4,410
Prepaid Insurance 460
Total Current Assets 11,980
TOTAL ASSETS RM55,280
Owner’s Equity
Beginning Capital 35,700
+ Net profit 1,610
Additional Capital 20,000
57,310
- Drawings (5,470)
Ending Capital 51,840

Current Liabilities
Accrued Utilities Expense 90
Accrued Misc. Expense 160
Accounts Payable 3,190
Total Liabilities 3,440
TOTAL OWNER’S EQUITY & LIABILITIES RM55,280