QUESTION 1
Part A
Queen started her business, Queen Yoga and Gym Centre on 1 January 2024. The following transactions occurred in March and April 2024 and was recorded by Queen to be updated into the accounts book:
Date Activities
Mar 1 Hired a new gym coach at RM3,000 per month.
3 Purchased gym equipment costing RM10,000 and paid RM1,500 by cash. The remaining balance was on account.
5 Pay full settlement on last month’s payable.
8 Received RM3,200 from Syarikat Mesra, a debtor, for last month’s yoga training.
The bill was dated 27 February 2024.
10 Purchase supplies on account amount RM2,400.
12 Signed a loan agreement, borrowing RM15,000 from Public Bank for 1 year.
Received cash on the same day.
15 Paid RM5,000 on gym equipment purchased on March 3.
19 Billed RM3,600 to Hotel Jasmine on yoga lesson provided to their staff.
21 Received advertising bill amounted RM1,800 for business advertising in social media.
28 Received cash RM6,000 from customers on yoga lesson performed.
30 Paid cash for rent RM1,500, yoga trainer fee RM3,000, monthly telephone and internet subscription fee RM186 and petrol RM200.
31 Emergency cash withdrawal of RM350 due to personal use. Apr 1 Paid advertising bill dated on March 21.
Given below are the ending account balance as at 29 February 2024:
Accounts Amount (RM) Accounts Amount (RM)
Cash 4,230 Equipment 15,000
Accounts receivable 3,200 Accounts payable 2,680
Supplies 540 Queen, Capital 20,290
Required
Based on the details provided for Queen Yoga and Gym Centre,
(i) Journalise all business transactions that incurred in the month of March 2024. Create new accounts if required. (Note: State “No entry” for non-business and unrelated activities.) (14 marks)
(ii) Prepare the T-account for Cash, Accounts Receivable and Service Revenue Accounts.
(Note: Prepare in T-account format.) (5 marks)
Part B
Donna Fashion Designs is a business owned by Donna, a professional fashion designer. The account balances extracted from the Statement of Profit or Loss at 31 January 2024 are as follows:
Revenue
Accounts Balance (RM)
Design Fee Revenue 18,000
List of expenses:
Depreciation expense Insurance expense Food expenses Salaries expense Telephone charges Maintenance expense
1,200
400
780
6,000
175
4,430
QUESTION 2
Part A
Jayanthi, the accounts clerk working for Suresh Delivery Services has journalised and posted all the transactions incurred in the year ended 31 December 2023. The accounts balance are listed as follows:
Accounts Amount (RM)
Accumulated Depreciation – Office Equipment 4,000
Suresh, Capital 50,450
Prepaid Insurance 3,600
Petrol and Diesel Expense 1,450
Service Revenue 102,200
Salaries Expenses 60,000
Motor Vehicles – Van 80,000
Accumulated Depreciation – Motor Vehicle 32,000
Unearned Service Revenue 9,900
Bank 24,500
Office Equipment 8,000
Supplies 2,200
Upkeep of Van 5,600
Office Expenses* 13,200
*Note: Office expenses includes utilities, office maintenance and rent expenses.
Below are additional information provided by Suresh when finalising the accounts at 31
December 2023:
- The prepaid insurance paid was for 3 years starting from 1 June 2023. b. 30% of the unearned service revenue was performed and earned.
- The total supplies used was RM500.
- Van repair amounted RM1,500 was accrued and subsequently paid on 5 January 2024. e. A bill amounted RM345 for service performed was not recorded in the accounts.
- The depreciation rates for motor vehicle and office equipment were 10% per year. The depreciation was charged every year at the end of December. There is no additional property, plant and equipment during the year.
Required
Assume you are Jayanthi and the instructions received from Suresh; the business owner, are as follows:
(i) Prepare the adjusting entries based on the information provided from (a) to (f). Show all workings. (Note: Create new accounts where ever necessary.) (12 marks)
(ii) Prepare the Adjusted Trial Balance for the year ended on 30 April 2024. Show all workings. (Note: Prepare using the proper format.) (7.5 marks)
Part B
Mrs. Chong was checking the company’s trial balance with totals that agree and discovered several transactions were wrongly updated in the books. Below are selected account balances of Chong Packaging Services for the month of October 2023:
Account Titles RM Account Titles RM
Packaging Supplies 3,000 Packaging Service Revenue 11,680
Accounts Receivable 7,000 Rent Expenses 2,300
Supplies Expenses 886 Utilities Expenses 1,056
Cash 35,890 Accounts payable 3,175
Below are the errors discovered by Mrs. Chong in the accounting records for the month of
October 2023:
- Packaging supplies on hand were actually amounted RM3,200.
- A service revenue amounted RM800 was wrongly billed to customer for RM80. c. RM300 for utilities was wrongly posted to rent expenses account.
- RM1,000 cash received from a debtor was wrongly debited to cash at RM100 and credited to packaging service revenue at RM100.
Required
(i) Journalise the correcting entries for the month of October 2023. Show all workings.
(3 marks) (ii) Compute the adjusted balance for Packaging Service Revenue. (1 mark)
(iii) Describe any THREE (3) weaknesses of a trial balance with totals that agree.
. (1.5 marks) (Total: 25 marks)
Required
(i) Determine the normal balance of the revenue accounts and expenses accounts either debit or credit. (1 mark)
(ii) Based on the balances, compute the net profit or loss for the month of January 2024.
(Note: Show all workings.) (2 marks)
(iii) On 1 January 2024, Donna, Capital Account showed a normal balance of RM13,750.
During the month of January 2024, Donna made an additional investment of RM5,000 into the business and withdrawn RM1,800 for personal use.
Based on the additional information above, prepare the Statement of Changes in Equity at 31 January 2024. (Note: Prepare in the proper reporting format.) (3 marks)
(Total: 25 marks)
QUESTION 3
Part A
(i) Briefly explain how revenue and expenses are recognised under accrual basis of accounting. (2 marks)
(ii) List and define the types of adjusting entries categorised under deferrals and accruals. (2 marks)
Part B
Winner Cleaning Company is a laundry cleaning service business. Below is the finalised trial balance of Winner Cleaning Company for the first quarter ended 31 March 2024.
Winner Cleaning Company
Adjusted Trial balance as at 31 March 2024
Accounts Titles Note Debit (RM) Credit (RM)
Shoplot building 300,000
Machine and equipment 47,960
Furniture 6,400
Accumulated depreciation – Shoplot
building 30,000
Accumulated depreciation – Machine and
equipment 14,388
Accumulated depreciation – Furniture 3,840
Goodwill 132,000
Short term investments a 106,280
Property investments b 369,500
Accounts receivables 2,172
Prepaid maintenance 18,000
Cleaning supplies 5,088
Cash 21,870
Loan payables c 158,000
Loan interest payable 1,068
Accounts payable 2,108
Unearned service revenue 1,575
Win, Capital d 804,521
Win, Drawings 875
Cleaning service revenue 40,500
Rent income e 9,000
Advertising expense 1,080
Depreciation on property, plant and
equipment 1,859
Maintenance fee expenses 4,800
Insurance expenses 6,000
Upkeep of machines 1,600
Salaries expenses 32,000
Accounting fees 900
Cleaning supplies expenses 3,124
Utilities expenses 1,092
Loan interest expenses f 2,400
RM1,065,000 RM1,065,000
Additional notes:
- The short term investments consists of short term bonds and shares. b. The property investment is for long term.
- 20% of loan payable is to be paid within the next quarter and the remaining in the subsequent quarters.
- The capital is the opening balance amount.
- Rent income received from renting out company’s machine.
- Total loan interest charged during the year as per loan statement.
Required
Show workings and prepare the following financial report for the first quarter ended 31 March 2024:
(i) Statement of Profit or Loss. (7.5 marks) (ii) Classified Statement of Financial Position. (13.5 marks)
(Total: 25 marks)
QUESTION 4
Part A
The finalised account balances extracted from the Adjusted Trial Balance of Max Talent
Trainers, a training and workshop business centre as at 30 April 2024 are as follows:
Account Titles Amount
(RM)
Account Titles Amount
(RM)
Traveling and accommodation expense
103,800 Office administrative expense
124,480
Advertising expense 18.600 Max, drawings 4,125
Trainer salaries expense 198,200 Depreciation expense 5,600
Entertainment expense 8,712 Supplies 33,945
Staff training payable 3,144 Tutoring income 48,250
Accumulated depreciation
– Equipment
25,200 Equipment 56,000
Repairs expense 9,600 Unearned fee revenue 14,000
Insurance expense 24,000 Machine rent expense 15,790
Training fee revenue 680,000 Repairs payable 1,000
Staff training 69,144 Cash 37,650
Supplies expense 72,360 Max, capital 11,181
Fees receivables 9,816 Account payables 13,775
Prepaid machine rent 4,728
Required
Assume that Max Talent Trainers Centre closes its accounts end of April annually, prepare the: (i) Closing entries at 30 April 2024. (10.5 marks) (ii) T-account for Max, Capital. (2 marks) (iii) Post Closing Trial Balance at end of April 2024. (7 marks)
Part B
(i) Briefly explain how journal contributes to the recording process in accounting.(3 marks)
(ii) Determine whether the following accounts either debit or credit when increases. a. Unearned rent revenue
- Prepaid advertising
- Accumulated depreciation – Motor vehicles d. Sundry payable
- Tina, Drawings (2.5 marks) (Total: 25 marks)
(Grand Total: 100 marks)
Answers to Above Questions on Business Accounting
Answer 1: The journal entries for all the transactions that are incurred in the month of March 2024 are indicated below:
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