KOLEJ UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF COMPUTING AND INFORMATION TECHNOLOGY

ACADEMIC YEAR 2021/2022

APRIL/MAY EXAMINATION

ABFA1513 ACCOUNTING METHODS I

WEDNESDAY, 18 MAY 2022 TIME: 2:00 PM – 4:00 PM (2 HOURS)

DIPLOMA IN COMPUTER SCIENCE

DIPLOMA IN INFORMATION SYSTEMS

DIPLOMA IN SCIENCE (COMPUTER SCIENCE AND MANAGEMENT MATHEMATICS)

Instructions to Candidates:

This paper consists of four questions and you are required to answer ALL FOUR (4) questions.

All workings that support the answers must be shown.

Marks will be awarded for clarity in presentation and logical arguments.

You are required to continue with a fresh page when answering new questions or parts of the question.

This question paper consists of 4 questions on 6 printed pages.

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ABFA1513 ACCOUNTING METHODS I

Answer ALL FOUR (4) questions.

Question 1

Blue Trading, a mini market which has been operating since 1990, has provided the trial balance for the
year ended 31 December 2021 as follows:

Debit Credit
RM RM
Inventories as at 1 January 2021 88,000
Discounts 660 780
Rental received 2,500
Trade receivables and Trade payables 67,000 63,000
Bank 3,300
Capital 300,000
Returns 1,700 1,900
Cash in hand 2,000
Advertisement 5,200
Wages 8,700
Purchases and Sales 315,390 474,910
5% Long term loan 60,000
Carriage inwards 1,300
Bad debts 1,800
Land and building 250,000
Delivery van 80,000
Office equipment 60,000
Accumulated depreciation – delivery van 6,000
Accumulated depreciation – office equipment 8,000
Utilities 1,660
Interest on loan 1,500
Drawings 5,600
Repairs and maintenance 3,200
Allowance for doubtful debts 800
Salaries 26,000
Commission received 2,400
Office rental 5,000
Interest received 2,600
Carriage outwards 1,480
926,190 926,190

Additional information:

1. Inventories as at 31 December 2021 were valued at RM79,500. The market value was
RM69,300.

2. RM2,500 rental received is for 6 months ended 31 March 2022.

3. Wages of RM760 have been wrongly taken up as salaries.

4. An account receivable of RM350 was not recoverable as at 31 December 2021.

This question paper consists of 4 questions on 6 printed pages.

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ABFA1513 ACCOUNTING METHODS I

Question 1 (Continued)

5. It was decided that the allowance for doubtful debts is to be adjusted to 2% of the net trade
receivables.

6. Depreciation is to be charged at the rates of 10% and 20% per annum for office equipment and
delivery van at cost respectively.

7. Part of the loan interest on the long term loan for the year ended 31 December 2021 was still
outstanding as at year end.

Required:

(a) Prepare the statement of profit or loss of Blue Trading for the year ended 31 December 2021.
(15 marks)

(b) Prepare the statement of financial position of Blue Trading as at 31 December 2021.
(10 marks)
[Total: 25 marks]

Question 2

The following trial balance as at 31 December 2021 was extracted from Macro Enterprise’s books:

Debit (RM) Credit (RM)

Building at cost 870,000
Accumulated depreciation - Building 54,000
Office equipment at cost 190,000
Accumulated depreciation - Office equipment 45,000
Machinery at cost 180,000
Accumulated depreciation - Machinery 32,500
Motor vehicles at cost 120,000
Accumulated depreciation -Motor vehicles 32,000

Additional information:

1. Office equipment costing RM60,000 which was purchased in the month of September 2021 was
omitted from the books.

2. Depreciation is to be charged as follows:

(a) Building at 5% on cost.

(b) Office equipment and motor vehicles at 20% on the straight line method.

(c) Machinery at 10% on the reducing balance method.

This question paper consists of 4 questions on 6 printed pages.

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ABFA1513 ACCOUNTING METHODS I

Question 2 (Continued)

3. A full year’s depreciation is to be charged in the year of acquisition and no depreciation is

charged in the year of disposal.

Required:

(a) Record the depreciation for the year ended 31 December 2021 in the general journal. Narrations
of the journal entries are required. (Show all the relevant workings) (12 marks)

(b) Prepare an extract of the statement of profit or loss for the year ended 31 December 2021 to
show the value of depreciation for each non-current asset. (4 marks)

(c) Prepare an extract of the statement of financial position as at 31 December 2021 to show the
value of all the non-current assets after depreciation. (5 marks)

(d) Briefly explain the purpose of charging depreciation on non-current assets. Relate your answer
to ONE (1) accounting concept. (4 marks)
[Total: 25 marks]

Question 3

(A)

Pro Hardware had started a hardware business in January 2018. The financial year end is on 31
December.

The following information relates to Pro Hardware:

Year ended 31 December 2019

A debt of RM600 was written off as bad debt and an allowance for doubtful debts of RM1,800 was
provided.

Year ended 31 December 2020

Debts amounting to RM1,500 were found to be bad and irrecoverable. As at 31 December 2020, the
total net trade receivables balance was RM76,000. Pro Hardware had decided to increase the allowance
for doubtful debts to 5% of the net trade receivables.

Year ended 31 December 2021

Debts amounting to RM1,800 were written off during the year ended 31 December 2021. Ivan, whose
debt of RM280 was written off in 2019, has settled his debt in full on 16 November 2021. The net trade
receivables balance on 31 December was RM60,000. The allowance for doubtful debts is to remain at
5% of the net trade receivables.

This question paper consists of 4 questions on 6 printed pages.

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ABFA1513 ACCOUNTING METHODS I

Question 3 (Continued)

Required:

Record the above transactions and adjustments in the following ledger accounts for the three years
ended 31 December 2021:

(a) Bad debts account; (3 marks)

(b) Doubtful debts account; (3 marks)

(c) Allowance for doubtful debts account; (5 marks)

(d) Bad debts recoverable account. (1 mark)

(B)

Michelle Bakery Enterprise bought a fire insurance on 1 June 2021 from a reputable insurance company.
The insurance premium is RM36,000 per annum and is payable in advance at the beginning of each
quarter.

Due to a slowdown in the business as a result of the pandemic, Michelle Bakery Enterprise has sublet
a portion of its shop to Amin Haircut Enterprise for RM300 per month starting on 1 June 2021. Michelle
Bakery Enterprise will receive the rental in advance on a quarterly basis.

The financial year for Michelle Bakery Enterprise ends on 31 March 2022.

Required:

(a) Prepare the following accounts for the year ended 31 March 2022 in the books of Michelle
Bakery Enterprise:

(i) Insurance account; (3 marks)

(ii) Prepaid insurance account; (1 mark)

(iii) Rental received account; (3 marks)

(iv) Rental received in advance account. (1 mark)

(b) Prepare journal entries to post the insurance expense and rental received to the statement of
profit or loss for the year ended 31 March 2022 and to adjust for the prepaid insurance and
rental received in advance as at the same date. (4 marks)

(c) Prepare an extract of the statement of financial position as at 31 March 2022. (1 mark)
[Total: 25 marks]

This question paper consists of 4 questions on 6 printed pages.

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ABFA1513 ACCOUNTING METHODS I

Question 4

(A)

The following are the purchase and sale transactions for Big Apple Enterprise for the month ended 31
December 2021:

Date Particular Amount

December 1 Opening balance 460 units at RM4.10 each
3 Sales 220 units at RM13.50 each
5 Purchases 120 units at RM5.20 each
12 Sales 270 units at RM14.20 each
15 Purchases 100 units at RM5.50 each
23 Purchases 130 units at RM5.70 each
30 Sales 160 units at RM15.10 each

Required:

Calculate the cost of purchase, cost of sales and value of the closing inventories as at 31 December
2021 using the First-in-first-out (FIFO) method. (19 marks)

(B)

XYZ Sdn Bhd started a trading business on 1 January 2022. The owner, Ms Tan, has injected
RM100,000, which she had loaned from her dad, into the business. As at 1 January 2022, the company
owes Ms Tan RM100,000. The following day, the business bought a van from TFC Car Sdn Bhd on
credit. An invoice for RM55,000 was received on the same day and the accounts clerk recorded the
transaction in the general ledger. During the month of January 2022, the sales revenue was RM150,000,
cost of goods sold was RM80,000, registering a gross profit of RM70,000. The expenses incurred for
the month was RM30,000. The owner was happy that the business managed to earn a net profit of
RM40,000 in its first month of operation.

Required:

Identify and explain the THREE (3) accounting concepts that are applied above. (6 marks)
[Total: 25 marks]

This question paper consists of 4 questions on 6 printed pages.