ANF 1114 ACCOUNTING & FINANCE I Page 1 of 15

ANF 1114 – ACCOUNTING & FINANCE I Page 1 of 15

Introduction to Accounting

QUESTION 1

Fill in the blanks and show the relevant workings.
i) / Abu Bakar Enterprise's balance sheet showed a capital account of RM480,000
and total liabilities of RM820,000. Encik Abu Bakar, the proprietor, bought
in additional capital in the form of a motor valued at RM50,000. The business
also purchased goods for RM70,000 and paid RM30,000 cash for it. The
reminder to be paid in one moth's time.
The firm's total equities would now be ______
ii) / Muttu Trading has RM350,000 for owner's equity and RM800,000 of total assets.
It purchase furniture for RM60,000, paying RM20,000 cash and promise to pay
the rest in three weeks time. The firm also collected RM40,000 from its debtors.
The firm's total liabilities now will be ______
iii) / Ah Chong Enterprises has liabilities of RM400,000 and owner's equity of
RM100,000. It purchases goods on credit for RM50,000 and collected
RM30,000 from its debtors. The firm's total assets would now be ______
iv) / Kristine Services purchased machinery for RM60,000 on credit. It sold some
furniture at cost of RM10,000, receiving RM5,000 cash and reminder of RM5,000
to be received at a later date. As a result, the total assets of the firm will be
______
v) / Jamilah Bookstore had total assets of RM800,000 at the beginning of the year.
During the year, the total liabilities of the firm inceased from RM400,000 to
RM600,000. The total assets increased to 1.5 times the total of the assets at
the beginning of the year. The owner's equity at the end of the year must be
______

(10 marks)

Accounting classification and Accounting equation

QUESTION 2

You are given some situation and you need to solve the problem

Zainal sets up a new business named Aerosupplies Partner Sdn Bhd. Before he actually sells anything, he has bought motor vehicle of RM 2,000, premises RM5, 000, stock of goods RM 1,000. He did not pay in full for his stock of goods and still owes RM400 in respect of them. He had borrowed RM3, 000 from Abidin. After the events just describe and before trading start, he has RM100 cash in hand and RM700 cash at bank. You are required to calculate the amount of his capital.

(5marks)

Zakiah, owner of Avi Supply Enterprise have problem in finding the total loan amount for his company. You need to draw up Avi Supply Enterprise Balance Sheet as at 31 December 2010 from the following items and find the missing value.

Capital30,000

Cash in hand16,500

Loan from Bank ?

Account Receivable8,000

Account Payable2,000

Stock8,500

Fixture and fitting15,000

(5 marks)

QUESTION 3

Bulgarian Aviation Company just run a new business. You, as an assistant accountant, need to state the journal entry and the effect on accounting equation for each of the following transaction.

1)Bought office equipment on credit

2)Sold goods to Daun on credit

3)Returned part of the goods that was previously bought on credit to Yahya

4)Motor van repairs being paid by cash

5)Owner of the business took goods for his personal use

6)One of the debtor/account receivable paid the amount that he owed by cheque

7)Paid salaries to workers by cheque

8)The owner take some amount of cash for paying his son’s school fees.

9)Takeout cash and put it into bank

10)Received dividend by cheque for the investment in the year

(10marks)

Accounting for Inventory and Double entry Principles

QUESTION4

On July 2010, EVA Air started business with the following assets and liabilities.

The following transaction took place during the month of July 2010

July / 1 / The owner bring in the motor vehicle and office equipment worth of RM18,000 and RM3,500 consequently.
1 / Owner invest in RM 12,000 cash into the business
1 / Purchase goods using cheque RM2,000
1 / The business make a loan from Avi Trading amounting RM1,200
2 / Paid Avi Trading the amount owing to them by cheque
5 / Took out RM4,000 from the bank account and put into cash account
7 / Paid electricity bill RM250 by cash
9 / Sold goods to Engine Co on credit RM880
10 / Cash sales to Azi Vee RM1,000
12 / Purchase goods on credit from Radiation Berhad RM2,000, given the trade discount of 10%
15 / Purchase office equipment on credit from Power Supply Sdn Bhd RM660
19 / Paid Radiation Berhad amount owing by cash and received a cash discount of RM180
23 / Engine Co returned damaged goods RM80
25 / Withdrew some stock for personal use RM150
30 / Took a bank loan from BCB Bank RM10,000 by cheque

You are required to:

a)Record the above transactions in the accounts and balance off the account at the end of the month

(10marks)

QUESTION 5

Below are the transactions for Cargolux for the month of April 2010. Record the transaction in the appropriate accounts.

1 / Started a business with RM4,500 cash
2 / Put RM3,500 of the cash into a bank account
3 / Bought goods by cash RM250
5 / Bought goods on credit from Wong RM1,000
6 / Sold goods on credit to Simex Bhd RM2,000
7 / Sold goods for cash RM2,250
8 / Returned goods to Wong RM65
9 / Paid rent by cheque RM200
10 / Simex Bhd returned goods worth RM85
10 / Bought motor van on credit from Maju Motor RM10,000
11 / Returned goods to Wong RM70
12 / Paid wages by cash RM250
13 / Received cheque RM3,000 being loan from Bank Islam
15 / Sold goods on credit to Short RM2,000
18 / Short returned goods worth RM125
20 / Received cheque from Simex Bhd after deducting 5% cash discount
25 / Sent a cheque to Wong RM830. Received cash discount RM35
28 / Deposit RM4,000 cash into the bank
30 / The owner took RM50 worth of goods for his own use.

(10 marks)

Trial Balance

QUESTION 6

Prepare a trial balance as at 31st December 2008 for Korean Air using the following balance.

AccountBalance

Cash5,000

Office equipment400

Debtor 1,200

Telephone expenses300

Creditor1,300

Purchase1,500

Sales4,500

Interest received200

Wages500

Motor vehicles900

Capital 4,000

Drawing200

(10 marks)

QUESTION 7

The following trial balance is wrong. You are required to prepare the correct trial balance as at December 2010 and calculate the amount of capital as at the date

Trial Balance as at December 2010

Particular / Debit / Credit
Capital
Motor vehicle / 25,000
Loan from BCB / 55,000
Creditor / 4,800
Debtor / 9,000
Cash at bank / 14,300
Cash in hand / 1,000
Salary / 2,000
Interest expenses / 350
Sales / 8,000
Purchase / 10,000
Return inward / 100
Opening stock / 2,400
Discount allowed / 60
Discount received / 200
Office equipment / 4,400
Telephone and electricity / 220

(10marks)

QUESTION 8

The financial position of Gading Sari Aviation Services Trading as at 1st January 2011 was as follows

During the month of January 2011, the following transaction took place

1 / Owner start the business with RM20,000 cash
2 / Paid telephone bill by cheque RM 300
3 / Received rent by cash RM460
5 / Cash purchase from Luncai RM1,000
6 / Sold goods to Leman RM6,600 and Roslan RM4,540 on credit
8 / Bought motor van from EON Bhd RM23,000 on credit
9 / Issued cheque to EON Bhd RM10,000
11 / Bought goods on credit from Musa RM2,360 and Awee RM3,600
12 / Vee Gee, the owner took goods RM860 and RM350 cash for his own use
15 / Issued credit noted to Roslan for good returned RM540
22 / Returned goods to Musa RM100
24 / Paid interest by cheque to BIMB RM90
26 / Roslan sent cheque to settle his account
29 / Sent cheque to Musa and Awee to settle the amount owing
31 / Paid wages Rm400 by cash

Requirement :

a)Record the above transaction in the relevant account

b)Balance off the account

c)Prepare a trial balance as at 31 January 2011

(10marks)

QUESTION 9

Below are the assets and liabilities account balance of Transmile Air as at 1st January 2011

Office equipment / 4,000
Account receivable
-Raslan
-Johan / 721
800
Bank / 1,200
Creditors
-Suhana
-Kasmah / 260
430

The following transaction took place during the month of January 2011

1 / Owner start the business with RM6,000 cash
1 / For starting the business, company buy office equipment amounting RM4,000
3 / Purchase goods on credit from Suhana RM460
5 / Cash sales RM500
6 / Returned damaged goods to Suhana RM25
7 / Sold goods to Johan RM 800 on credit
8 / Johan paid RM300 in cash to settle his debt
9 / Bought additional office equipment RM760 from Dahlia Sdn Bhd on credit
12 / Purchase RM480 worth of goods by cheque
13 / Paid transportation expenses RM350 by cheque
14 / Goods worth RM600 were taken by Balqis for personal use
19 / Credit sales RM220 to Siva and RM320 to Wai Keng
22 / Wai Keng returned defective goods worth RM55
24 / Paid all debt due to Kasmah by cheque. A cash discount of 15% was given by Kasmah
29 / Siva settle his account by cheque after a cash discount of 10%

You are required to

a)Record the above transaction into the relevant ledger account

(10marks)

QUESTION 10

Below is the account of Air Ambulance Service for the month end January 2011

CAPITAL
Jan 1 / Cash / 100,000
CASH
Jan 1 / Capital / 100,000 / Jan 2 / Purchase / 4,500
Jan 5 / Sales / 8,000 / Jan 3 / Motor vehicle / 40,000
Jan 8 / Debtor/account receivable / 15,000 / Jan 7 / Sundry expenses / 200
Jan 10 / Creditor / 8,000
CREDITOR
Jan 10 / Cash / 8,000 / Jan 4 / Purchase / 10,000
Jan 11 / Return outward / 1,000
ACCOUNT RECEIVABLE/DEBTOR
Jan 6 / sales / 20,000 / JAN 8 / Cash / 15,000
Jan 9 / Return inward / 3,000
PURCHASE
Jan 2 / Cash / 4,500
Jan 4 / Creditors / 10,000
MOTOR VEHICLES
Jan 3 / Cash / 40,000
SALES
Jan 5 / Cash / 8,000
Jan 6 / Debtor/account receivable / 20,000
SUNDRY EXPENSES
Jan 7 / Cash / 200
RETURN INWARD
Jan 9 / Account receivable/debtor / 3,000
RETURN OUTWARD
Jan 11 / Creditor / 1,000

You are required to

a)Write the journal entries for each of the date based on the account recorded above

(10marks)

Bank Reconciliation

QUESTION 11

MHS Aviation Berhad received his bank statement on 31 December 2010. However the balance statement is different from the balance in his cash book. Detailed of each are given below.

CASH BOOK
Dec 27 / Balance b/d / 400 / Dec 28 / Zana / 105
Dec 29 / Shimah / 60 / Dec 30 / Muthu / 15
Dec 31 / Ah Chai / 220 / Dec 31 / Balance c/d / 560
680 / 680
Jan 1 2011 / Balance b/d / 560
BANK STATEMENT
PAYMENT / RECEIPT / BALANCE
Dec 27 / Balance b/d / 400 (CR)
Dec 29 / Cheque / 60 / 460(CR)
Dec 30 / Zana / 105 / 355(CR)
Credit transfer to Azizah / 70 / 425(CR)
Bank charges / 20 / 405(CR)

You are required to prepare

a)The adjusted cash book

b)The bank reconciliation statement as at 31 December 2010

c)Give the reasons of differences in bank statement and cash book

(10marks)

QUESTION 12

The bank column in the cash book for July 2010 and the bank statement for the month for Mauritania Airways are as follow

CASH BOOK
July 1 / Balance b/d / 11,895 / July 6 / 0809 / 750
July 8 / Ali Lek / 790 / July 13 / 1704 / 2,165
July 17 / Vellu / 465 / July 17 / 1789 / 440
July 29 / Farouk / 1,535 / July 30 / Kelab Aktif / 285
July 31 / See Tat / 3,120 / July 31 / Balance c/d / 14,165
17,805 / 17,805
BANK STATEMENT
PAYMENT / RECEIPT / BALANCE
July 1 / Balance b/d / 11,895
July 8 / Cheque / 790 / 12,685
July 9 / 0809 / 750 / 11,935
July17 / Coequal / 465 / 12,400
July 18 / 1704 / 2,165 / 10,235
July 19 / 1789 / 440 / 9,795
July 29 / Cheque / 1,535 / 11,330
July 30 / Standing order / 220 / 11,110
July 31 / Mohd Ali : trader’s credit / 450 / 11,560
July 31 / Bank Charges / 350 / 11,210

Requirement:

a)Update the cash book by taking the above into account

b)Draw up a bank reconciliation statement as at 31 July 2010

(10marks)

QUESTION 13

You are provided the statement of account and cash book for Red Sea Air

Statement of Account

RHB BANK

Date / Particular / Debit / Credit / Balance
2008 / RM / RM / RM
Brought forward / 200.20 Cr
March 3 / Cash deposit / 6,000.00 / 6,200.20 Cr
March 4 / EFTPOS / 1,500.00 / 7,700.20 Cr
March 6 / Cheque book / 5.00 / 7,695.20 Cr
March 8 / 89090 / 450.00 / 7,245.20 Cr
March 10 / 89091 / 600.00 / 6,645.20 Cr
March 12 / 89092 / 343.00 / 6,302.20 Cr
March 15 / Bank GIRO credit / 542.00 / 6,844.20 Cr
March 20 / Direct debit / 465.00 / 6,379.20 Cr
March 25 / Dividend / 245.80 / 6,625.00 Cr
March 28 / Bank charges / 10.00 / 6,615.00 Cr

CASH BOOK

2008 RM
Balance b/d 200.20
Cash deposit 6,000.00
EFTPOS 1,500.00
Ros Brother

680 / 2008 RM
Cheque book 5.00
Lim Auto 450.00
Calmex Bhd 600.00
Ali – 89092 343.00
Ben – 89094 300.00
Balance c/d 6,102.20
680

You are required to prepare:

a)The Adjusted cash book

b)The Bank Reconciliation Statement as at 31st December 2009

(10 MARKS)

Final Account

QUESTION 14

From the following balance of Sierra National Airlines, draw up Trading, Profit and Loss account for the year ended 30 September 2009 and the Balance Sheet as at date.

Trial Balance as at 30 September 2009

Particular / Debit (RM) / Credit (RM)
Inventories on 1 October 2008 / 2,368
Carriage Outward / 200
Carriage Inward / 310
Return outward / 322
Return inward / 248
Purchase / 10,874
Sales / 19,600
Salaries and wages / 3,862
Advertisement / 211
Rent / 304
Insurance / 242
Office expenses / 382
General expenses / 314
Premises / 35,555
Fixture and fitting / 2,800
Trade debtors / 3,896
Trade creditors / 1,231
Fixed deposit at BIMB / 8,000
Cash in hand / 482
Cash at bank / 1,210
Drawing / 1,200
Capital / 36,000
Loan from MBF Finance / 15,000
Discount allowed and discount received / 45 / 350
72,503 / 72,503

Stock at 30 September 2009 was RM2, 900

(10 marks)

QUESTION 15

Sudan Airways asks your help to prepare their financial statement. The only information that given to you is trial balance as at 31 December 2009. From the following trial balance, prepare the Balance Sheet and Trading, Profit and Loss account for the year ended 31 December 2009.

Sudan Airways Trail Balance as at 31 December 2009

Particular / Debit / Credit
Sales / 100,000
Purchase / 45,000
Return inward / 100
Return outward / 140
Carriage outward / 330
Opening stock / 1,200
Electricity, telephone and water / 200
Discount Allowed / 130
Discount Received / 180
Salary / 3,400
Repaired of Motor Vehicle / 690
Printing and stationary / 300
Debtor / 8,000
Creditor / 13,000
Long term loan / 10,000
Bank / 19,500
Cash / 500
Motor Vehicle / 30,000
Furniture and Fitting / 20,400
Capital / 7,230
Drawing / 800
130,500 / 130,500

Stock as at December 2009 is RM3, 000

(10 marks)

QUESTION 16

Angkor Airways, a sundry shop business, owned by Mr.Zul had the following list of balance as at 30 June 2009:

RM
Capital / ?
Purchase / 129,400
Sales / 220,900
Return inwards / 1,400
Return outward / 520
Drawing / 2,400
Fixture and fitting at cost / 9,800
Motor vehicle at cost / 25,000
Debtors / 46,300
Creditors / 34,900
Stock as at 1st July 2008 / 38,000
12% Loan from AF Bank / 35,000
Investment / 48,800
Bank / 22,000
Carriage inward / 660
Carriage outwards / 3,900
Salaries and wages expenses / 27,300
Discount allowed / 3,200
Discount received / 5,500
Telephone, water and electricity expenses / 3,800
Insurance expenses / 3,600
Insurance expenses prepaid as at 1 July2008 / 600
Bad debt / 1,500
Motor expenses / 2,700
Rental income / 8,800
Provision for doubtful debt / 270
Provision for depreciation – fixture and fitting / 1,900
Provision for depreciation – motor vehicles / 15,500

Stock as at 30 June 2009 was RM 22,150

Requirement :

a)Trading, profit and loss account for the year ended 30 June 2009

b)The Balance Sheet as at 30 June 2009

(10 marks)

Adjustment for accrual and prepayment

QUESTION 17

The following are the unadjusted account balances extracted from the ledger of Armenian Airlines at 31st July 2009

Debit / Credit
Salaries / 6,000
Commission revenue / 4,000
Stationary / 400
Rent revenue / 8,500
Interest revenue / 3,000

The following adjustment need to be made in 31st July 2009

Salaries of RM2,400 had not been paid
Commission revenue received in advance amounted to RM1,000
RM100 of the stationary was not yet used up.
RM500 of rent revenue was for August 2000
Interest revenue of RM800 was not yet received.

Required

a)Show the relevance account that related to the above transaction

b)Record in the Trading, Profit and Loss (extract) and Balance sheet (extract) for the year ended 31 July 2009

(10 marks)

QUESTION 18

Accrued and prepaid exist when there is payments made in advance or payment not yet received.

Show the required entries for each of the following.

Telephone expenses of RM250 incurred but not yet paid
Salaries owing at the end of the financial year was RM500
Accrued dividend expenses RM45
Dividend received of RM140 for the current accounting year was not yet received
Insurance expenses amounting to RM350 was paid in advance for the next accounting period
Interest on loan still outstanding RM150
RM550 of the rental income received was for the next accounting period
Wages RM300 still owed
Electricity incurred but not paid amounted to RM200
RM490 of the interest received was not earn

(10marks)

QUESTION 19

The following information was extracted from the books of Citilink Garuda Indonesia:

Balance as at 1 October 20XX

Prepaid advertising expensesRM 5,625

Rent revenue received in advanceRM 1,200

During the year ended 30 September 20XX, the following transactions were identified:

Payment for advertising expenses by cheque RM 6,000

Received rent revenue in cashRM 14,400

Balance as at 30 September 20XX

Accrued advertising expensesRM 2,500

Rent revenue received in advanceRM 1,200

You are required to show all expenses and revenue account and extract profit and loss account and balance sheet as at 30 September 20XX

(10 marks)

QUESTION 20

Iskandar is a new accountsclerk of Damania Airways. His boss wanted him to review all the documents regarding the accrual and prepayment matters for the year ending 31 December 2010. Iskandar has been provide with the following information.

Balance sheet (extract) as at 1 Jan 2010

Salaries expenses accruedRM 300

Prepaid utilities expensesRM 1,500

Rental income received in advanceRM 1,800

Profit and Loss (extract) for the year ended 31 December 2010

Salaries expensesRM 3,500

Utilities expensesRM 8,000

Rental incomeRM 12,000

The amount paid and received during the year are as follows:

BANK ACCOUNT
Rental income / 10,000 / Salaries expenses / 4,000
Utilities expenses / 5,000

Required:

a)Salaries expenses account

b)Utilities expenses account

c)Rental income account

d)Balance sheet (extract) as at 31 December 2010

(10marks)

QUESTION 21

Below are the balance of Eastar Jet as at the end of accounting period. Someadjustments need to do by Murni’s accountant.

Dr (RM) / Cr (RM)
Salaries and wages / 6000
commission revenue / 4000
Stationary / 400
Rent revenue / 8500
Interest revenue / 3000
Additional information:
Salaries and wages of RM2,400 had not been paid.
Commission revenue received in advanced amounted to RM1,000
RM100 of the stationary was not yet used up
RM500 of rent revenue was for August 2009
Interest revenue of RM800 was not yet received
Required:
a. Show the relevant accounts affected by the above adjustments
b. Income statement (extract) for the year ended 31 July 2009
c. Balance Sheet (extract) as at 31 July 2009

(10 marks)

Accounting for Account Receivables

QUESTION 22

Dai Nippon Koku has the following account balance as at 30 June 2009

RM
Account receivable / 200,000
Allowance for doubtful debt / 6,000
Allowance for discount allowable / 3,000
Bad debt / 2,000

On 30 June 2009, the following adjustments have to be made;

Debt of RM500 are to be written off as bad
One of the debtors whose debt had previously been written off as bad sent a cheque for RM 1,000 in full settlement of the amount owing
The allowance for doubtful debt and discount allowable are 2% and 1% respectively of the outstanding account receivable

You are required to show the necessary adjustment for the above

(10 marks)

QUESTION 23

There are some reasons why account receivables fail to pay their debt. These amounts will be deducted from the account receivable account. You are given a few situations and need to solve these problems

For the year ended 31 December 2010, total account receivable of Royal Bhutan Airlines was RM 50,000. One of the account receivable, Azhar had been bankrupt and his account of RM5,000 has to be written off as a bad debt. Provision for doubtful debt is to be provided at 8% on the net debtors. Show the ledger entries for the adjustment above and an extract of balance sheet as at 31 December 2010.

On 31 December 2003, the account receivable balance appeared in Trial Balance are RM 32,900. Adjustment during the year:

To write off RM 1,200 as bad debt
To provide for doubtful debt 5% of account receivable.

You are required to record the above in the relevant ledger account and show extract profit and loss account and balance sheet extract.