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Final Exam July 2022 (Answers)

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School
Universiti Teknologi Mara**We aren't endorsed by this school
Course
FAR 110
Subject
Accounting
Date
Dec 18, 2024
Pages
8
Uploaded by PrivateGoose4872
1 FAR110 - Solution FA July 2022 QUESTION 1 a. i. THREE(3)basic activities of accounting Identification- a business determines the economic events that are relevant to its business as the beginning point for the accounting process. Selling and purchasing goods, paying salaries and wages, depreciating assets, and other economic events are all examples of economic events. Recording - the recording entails keeping monetary measures of a systemic, chronological journal of events, as well as classifying and summarising economic occurrences. Communicating–preparation & distribution of accounting reports and financial statements, as well as analyzing and interpreting data. ii.THREE (3)benefits of public limited companies. 1. The company may raise its capital by issuing public shares 2.Shareholders have limited liability, which means they are not personally liable for the corporate entity's debt.3. Shareholders have the option to sell all or part of their stock to other investors at any time.iii. Accounting concept that have been violated: Business entity concept- Paying the utility bill for Nina's personal residence cannot be recorded as an expense to the business. It is considered a drawing by owner because his personal expenses. Accrual conceptThe business should recognised revenue as it is earned and not when it is received, and recognising expenses as it is earned and not when it is paid. iv. Users Category Uses Management Internal To make important business decisions that affect its continued operations. Suppliers external To evaluate the ability of the business to repay the debts or loan Owners Internal To assess the business performance and take any remedial action to overcome the problem. Inland Revenue external To determine the appropriateness of tax paid by the business. Potential investors External To assess the viability of investing in a business.
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2 QUESTION 2 A. i. Sales ledger records the credit sales and debtors . Purchase ledger records credit purchases transactions and creditors' information. General Journal Date Particular Folio Debit Credit 2022 Jan 1 Cash in hand a/c Cash at bank a/c Office equipment a/c Capital a/c 1,100 25,000 15,000 41,100 Cash Receipt Journal Date Particular Folio Discount allowed Cash Bank 2022 Jan 1 Bank loan 50,000 10 A/C Receivable –Sunny Sdn Bhd 205 1,845 11 Sales 2,400 31 Transfer to trial balance 205 2,400 51,845 Cash Payment Journal Date Particular Folio Discount received Cash Bank 2022 Jan 14 25 21 31 Purchases Salary expenses Sales return account/ cash refund AP: Aminah Trading 1,600 300 2,400 4,500 Transfer to trial balance 1,600 6,500 Purchases Journal Date Particular Folio Invoice no. Amount 2022 Jan 16 A/C Payable –Aminah Trading 5,000 31 Transferred to Purchases a/c in General Ledger 5,000 Sales Journal Date Particular Folio Invoice no. Amount 2022 Jan 3 A/C Receivable –Sunny Sdn Bhd 2,300 31 Transfer to Sales a/c in General Ledger 2,300 Return Inwards Journal Date Particular Folio Invoice no. Amount 2022 Jan 5 A/C Receivable - Sunny Sdn Bhd 250 31 Transferred to Trial Balance 550
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3 Return Outwards Journal Date Particular Folio Invoice no. Amount 2022 Jan 23 A/C Payable –Aminah Trading 500 31 Transferred to Trial Balance 500 B.(i) 1 Jan Error of principle 9 June Error of transposition 12 August Complete reversal of entries ii. General Journal Date Particular Folio Debit Credit Jan 1 Dr. Office equipment 3,400 Cr. Purchase 3,400 June 9 Dr. Dhanish Trading a/c 90 Cr. Sales a/c 90 Aug 12 Dr. Bezza Enterprise a/c 2,500 Cr. Bank a/c 2,500 QUESTION 3 A. Petty cash book Amount received Date Particular Total payments Office expenses Postage Van expenses Sundry expenses 50√200√Feb 1 Feb 5 Feb 9 Feb 10 Feb 17 Feb 20 Feb 21 Feb 23 Feb 25 Feb 26 Balance b/d Cash (or Bank) Cleaning Exp. Van Exp. Office Exp. Donation Exp. Van Exp Postage Refreshment Exp Postage Office Exp 25 20 15 50 45 20 30 13 17 15 17 20 13 20 45 25 50 30 235 32 33 65 105 Feb 28 Balance c/d 15 250 250 15 Mar 1 Balance b/d 235 Cash(or Bank)
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4 B. i.The journal entries DR (RM) CR (RM) i Suspense account 2,000 Sales 2,000 ii Suspense 108 Telephone expense 108 iii Ahmad Enterprise 670 Ali Ahmad 670 iv Repair motor vehicle 550 Motor vehicle 550 v Suspense 1,800 Rent received 1,800 vi Purchase 658 Mithali Trading 658 ii. The Suspense Account Date Particulars DR CR Bal Difference in the books 3,908 3,908 Sales 2,000 1,908 Telephone expenses 108 1,800 Rent received 1,800 0 iii. Corrected net profit RM Net profit before adjustment 38,560 Add: Telephone expense overstate 108 Sales understate 2,000 Rent received 1,800 Less: Repair expenses understate 550 Purchase 658 Corrected net profit for the year 41,260 QUESTION 4 a.Differentiate between long-term fixed deposit and long-term loan. Fixed deposit is a type of bank account that promises the investor a fixed rate of interest. In return, the investor agrees not to withdraw or access their funds for a fixed period. It is classified as an item of investment under non-current assets. Meanwhile, long-term loan is a debt matured after 12 months and it is classified as a non-current liability.
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5 b Sofya Enterprise Statement of Profit or Loss for the year ended 31 December 2021 RM RM RM Sales Revenues: Sales 205,000 - Return Inwards (1,100) - Discount Allowed (3,800) Net Sales 200,100 Cost of Sales: Opening Inventory 8,000 Purchases 65,000 - Return Outwards (1,600) - Discount Received (2,200) Net Purchases 61,200 + Carriage inwards 1,800 63,000 71,000 - Closing Inventory (12,000) (59,000) Gross Profit 141,100 Other Revenues: Commission received 1,500 Interest on fixed deposit (8% x 37500 x 7/12) 1,750 144,350 Other Expenses: Carriage outwards 3,400 Salaries and wages (48,000 –8,000) 40,000 Utilities 6,300 Stationery 500 Interest on loan (6% x 70,000 x 9/12) 3,150 Depreciation –Building (10% x 88,000) 8,800 Depreciation - Motor vehicles (20% x (55,000 - 19,800)) 7,040 Depreciation - Furniture and fittings (15% x 4,400) 660 (69,850) Net Profit 74,500
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6 Sofya Enterprise Statement of Financial Position as at 31 December 2021 RM RM RM Non-Current Assets Cost Accumulated Depreciation Carrying Value Building 88,000 26,400 (17600+8800) 61,600 Motor vehicles 55,000 26,840 (19800+7040) 28,160 Furniture and fittings 4,400 1,980 (1,320+660) 2,420 92,180 8% Fixed Deposit 37,500 129,680 Current Assets Inventory 12,000 Trade Receivable 85,000 Bank (82,000 –200) 81,800 Cash 5,000 Prepaid Salaries and wages 8,000 Accrued Interest on fixed deposit (1,750 - 1,000) 750 192,550 322,230 Financed by: Owner’s EquityOpening Capital 140,080 + Net Profit 74,500 - Drawings (3,300 + 200) (3,500) Ending Capital 211,080 Non-Current Liability 6% Loan from Bank Amanah 70,000 Current Liabilities Trade Payable 38,000 Accrued Interest on loan 3,150 41,150 322,230 QUESTION 5 a.Discuss FOUR (4)importance of accounting ratios to internal users. 1.Accounting ratios helps in for assessing liquidity, solvency, profitability, and management efficiency of a business. 2.It helps to make an inter-firm and intra-firm financial performance comparison. This will improve the business future achievement. 3.It shows the business short-term liquidity position, i.e., whether the business can
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7 maintain its short-term obligations or not. This can easily be determined by applying liquidity ratios. 4.Track company performance 5.Make comparative judgement over company performance Calculate the following ratios for the year ended 31 December 2021 for Hidayah Enterprise. Type of RatioFindings i. Current Ratio= CA CL = RM50,250 (12,500+25,000+11,250+1,500) RM30,000 = 1.68 times @ 1.68 : 1 ii. Quick Ratio= CA –CI –PE CL = RM50,250 –12,500–1,500 RM30,000 = 1.21 time @ 1.21 : 1 iii. Inventory Turnover Ratio= COGS Avg Inv. = RM31,250 (25%x 125,000) RM10,000 (7,500+12,500 ÷ 2) = 3.13 times iv. Gross Profit Margin = GP x 100% NS = RM93,750 (125,000 –31,250) x 100% RM125,000 = 75% v. Net Profit Margin = NP x 100% NS = RM35,000 x 100% RM125,000 = 28% QUESTION 6 a. i. Unpresented cheque ii. Uncredited cheque iii. Cashbook error / Bank error ) b. Aryanie Grandy Bank Reconciliation Statement as at 28 February 2022 RM RM Balance as per bank statement 15,800 Add: Error - Lumina Sdn Bhd 2,700 Uncredited cheque - Sales 1,000
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8 Uncredited cheque - Mulan 450 Uncredited cheque - Wong 1,750 Uncredited cheque - Mamat 2,500 8,400 Less: Error - 750110 5,000 Unpresented cheque - 220017 4,200 Unpresented cheque - 220016 1,300 10,500 Balance as per bank account 13,700 Balance as per bank account 20,400 Add: Credit transfer - Lumina Sdn Bhd 1,350 Credit transfer - Lumina Sdn Bhd 500 Commission - Sue Li 350 Cash deposit 3,600 5,800 Less: Dishonoured cheque - Siti 2,300 Error - 220012 (4050 x) 8,100 Error - 220012 450 Bank charges 150 Standing instruction 1,500 12,500 Balance as per bank statement 13,700
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