Homework answers / question archive / ASSIGNMENT BBM206/03 Accounting and Costing Question 1 Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018

ASSIGNMENT BBM206/03 Accounting and Costing Question 1 Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018

Accounting

Share With

---

ASSIGNMENT BBM206/03 Accounting and Costing

Question 1

Sejati Bhd buys a new machinery for RM10,000 on 1 January 2018. The machinery is estimated to be used for 5 years. After exactly 3 years, however, the machinery is suddenly sold for RM5,000. Sejati Bhd always provide a full year’s depreciation in the year when assets are purchased and no depreciation in the year when assets are disposed.

Required:

Prepare the accumulated depreciation for machinery accounts and machinery disposal accounts for years 2018, 2019 and 2020:

1. Using the straight-line depreciation method (assume 20% p.a.).             (7 marks)

 

2. Using the reducing balance depreciation method (assume 40% p.a.).    (8 marks)

  

 

Question 2 

           

Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows:

 

Statements of

Comprehensive

                     

Income		Company A		Company B
		RM             RM		RM           RM
Sales		160,000		240,000
Cost of sales		(120,000)		(180,000)
Gross profit		40,000		60,000
Less:
Administration expenses Selling and distribution		12,000		18,000
expenses Other operating		6,000		9,500
expenses		10,000		14,000
Financial expenses		3,000		500

 

(

31,000

)

9,000

(

42,000

)

18,000

Net profit                               

 

  

…3/-

 

 

                                                             Company A                           Company B   

 

                                                                RM          RM                       RM          RM   

Statements of

Financial

                              

Position Non- current
Assets					80,000			180,000
Current Assets
Inventory				30,000			50,000
Receivables				6,000			20,000
Bank				4,000			10,000

 

40,000

120,000

Total Asset                            

 

Capital and reserves
Ordinary share capital				60,000			160,000

 

Accumulated  profits                                        20,000                

 

                                                                       80,000                

Non Current liabilities
10% Loan stock				30,000				5,000
Current liabilities

Payables                                                    

             

 

 

Total Capital and reserves                             120,000                

 

 

Required:

 

1. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio:

 

1. 1. Gross Profit Margin
   2. Net Profit Margin
   3. Inventory Turnover Period (days)
   4. Receivables Collection Period (days)
   5. Payables Payment Period (days)
   6. Current Ratio vii.     Quick Ratio

                (8 marks) 

2. Comment on each of the ratios calculated in part (a) above.                   (7 marks)

…4/-                

Question 3 

 

Success Sdn Bhd sells lorries. During the current year, 100 lorries were sold resulting in RM820,000 of sales revenue, RM250,000 of variable costs, and RM342,000 of fixed costs.

 

Required:

 

Calculate

 

1. the number of lorries that must be sold to achieve RM300,000 of operating

income.                                                                                                 (7 marks)

 

2. the contribution margin at the breakeven point of 2,000 units, variable costs total RM4,000 and fixed costs total RM6,000.                                      (4 marks)

                                                                                            

3. Explain the term breakeven point.                                                        (4 marks)

 

 

 

Question 4  

 

John, Lee and Tony are in partnership, preparing accounts to 31 October each year. Their partnership agreement states that:

 

1. The partners are entitled to 5% per annum interest on their opening capital accounts. No interest is allowed (or charged) on current account balances.

 

2. Interest is charged on the partners' drawings at 7% per annum. Their drawings during the year to 31 October 2020 were as follows:

                                                       John                       RM30,000

                                                       Lee                        RM20,000

                                                       Tony                      RM3,000

 

3. Partners' annual salaries are RM6,000 and RM 12,000 for Lee and Tony respectively.

 

4. Remaining profits and losses are shared between John, Lee and Tony in the ratio of 5:4:1.

…5/-

 

5. The partners' capital and current account balances as at 1 November 2019 are as follows:

                                                                   Capital a/c          Current a/c

                                                                   RM                     RM

                                            John               50,000                16,320 Cr

                                            Lee                 30,000                1,110 Cr

                                            Tony               10,000                (590) Dr

 

The capital account balances remained unchanged during the year to 31 October     2020.

 

6. The partnership's net profit for the year to 31 October 2020 is RM81,961.

 

Required:

 

1. Prepare a profit distribution account for the year ended 31 October 2020.

                                                                                                                (10 marks)

2. Prepare the partners' current accounts (in columnar form) for the year to 31

October 2020.                                                                                            (5 marks)

c.         

(Note: All the figures must be rounded up to the nearest RM)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

…6/-

 

Question 5 

 

The following is the Trial Balance of Maple Union Berhad at 31 December 2020.

 

		DR                     CR
		RM	RM
Machinery at cost                                           Accumulated depreciation as of 1 January		60,000
2020– machinery			10,000
Motor vehicles at cost Accumulated depreciation as of 1		50,000
January 2020 – motor vehicles			8,000
Furniture & equipment at cost                        Accumulated depreciation as of 1 January		25,000
2020– furniture & equipment Long term loan (repayable on 30			5,000
November 2022)			30,000
Ordinary share capital			50,000
9% preference share capital			30,000
Trade receivables & payables		38,000	21,000
Allowance for doubtful debts			400
Sales & purchases		190,000	303,600
Salaries & wages		24,000
Bank		34,500
Bad debts		600
Returns		2,100	1,950
Discounts		1,600	1,850
Loan interest		1,500
Telephone expenses		4,000
Rent, rates and insurance		16,000
Inventory as of 1 January 2020		4,500
Retained earnings as of 1 January 2020		10,000
		461,800	461,800

…7/-

 

The following additional information are available:

 

1. Inventory at 31 December 2020 is valued at RM13,000.
2. Rates and insurance are prepaid by RM1,500. iii. Wages of RM400 is owed. iv. The allowance for doubtful debts is fixed at 4% of trade receivable balances. 

      Bad debts of RM500 is to be written off.

v. Rent of RM400 is due but yet to be paid. vi. Long term loan interest is 10% per annum. vii. Depreciation of motor vehicles and furniture & equipment are based on 15% per      annum on cost. Machinery is depreciated at 15% per annum on reducing balance      method. viii. The director proposed a final ordinary dividend of 10%.

ix. The proposed corporate tax rate is 30%.

Required:

Prepare:

1. the Statement of Comprehensive Income for the year ended 31 December

2020.                                                                                          (25 marks)

2. the Statement of Financial Position as at 31 December 2020.  (15 marks)

END OF QUESTION PAPER