BAAB1014 BUSINESS ACCOUNTING

Assignment Guidelines and Rubrics

Assignment 1 – 20%

Learning outcomes

1. Explain the basic concepts of accounting, bookkeeping and cost accounting terminology. 2.
Systematically recording business transactions in appropriate accounting records.
3. Prepare basic financial statements, management reports and various alternative cost management
system.

Instructions/Writing Prompts

Group Assignment (Instructions) 20%

Please refer to the file below for the details of your assignment. This is a group assignment which carries 20% and is based
on what you have learnt in Lesson 1 - Lesson 6.

The due date for this assignment is by the end of Week 10.

The assignment is attached.

Group 1 – Members & Matric No: 1) Hareen Muthaliar A/L Sundra Ganes. (MC230522649)
2) Edwin Joses A/L JOSEPH. (MC230321339)
3) Mak Hui Yi (MC230522021)
4) Lee Kah Hui. (MC230522017)

Submission Date: 7/15/2023

Instructions: Answer all questions.

Question 1

Mr. Badrol established a tour agency on 1 January 2021. The transactions for the month are as follows:

Date Transactions
1 Started in business and deposited RM60,000 into a bank account opened specially for the business.

2 Owner buys some goods for RM8,000 from Salleh, and agrees to pay them sometime within the next two
weeks.

10 Bought office equipment worth RM10,000 by cheque.

11 Sold goods worth RM5,000 on credit.
12 Received cheque of RM5,000 from customer
14 Paid creditors amount due RM8,000 by cheque.
25 Paid utility expenses amounting to RM400 by cheque.
27 The business borrows RM30,000 from the bank, the loan to be repaid in 3 years.
30 Received dividend for the year 2021 for RM5,000. This amount has been credited in the company’s bank
account.

As per the example provided below, you are required to:

1 January 2021- Started in business and deposited RM60,000 into a bank account opened specially for the business.

2019 Effects Account to be Account to be Book prime of

debited credited entry
Jan 1 Increase asset Bank RM 60,000 General journal
Increase capital Capital RM60,000

a) Show the effects (increase/decrease) upon assets, liabilities, expenses, revenue and owner’s equity for the
transactions.
(4 marks)
b) State the journal entries (debit/credit).
(4 marks)
c) Identify the appropriate book of prime entry to record the transactions.
(2 marks)
(Total:10 Marks)

Answers:
Q1: Answers

2019 Effects Account to be Account to be Book prime

debited credited of entry
Jan 1 Increase Bank Bank RM60,000 General
Increase Capital Capital Journal
RM60,000
Jan 2 Increase Inventory Inventory General
Increase Accounts RM8,000 Accounts Journal
Payable Payable
RM8,000
Jan Increase Office Office Equipment Cash Book
10 Equipment RM10,000 Bank RM10,000 Journal
Decrease Cash
Jan Increase Accounts Accounts Sales Journal
11 Receivable Receivable Sales RM5,000
Increase Sales RM5,000
Jan Increase Cash Bank RM5,000 Cash Book
12 Decrease Accounts Journal
Accounts Receivable Receivable
RM5,000
Jan Decrease Accounts Payable Cash Book
14 Accounts Payable RM8,000 Bank RM8,000 Journal
Decrease Cash
Jan Increase Utilities Utilities Expense Cash Book
25 Expense RM400 Bank RM400 Journal
Decrease Cash
Jan Increase Cash Bank RM30,000 Cash Book
27 Increase Bank Loan Bank Loan Journal
RM30,000
Jan Increase Cash Bank RM5,000 Cash Book
30 Increase Dividend Dividend Journal
Revenue
RM5,000
Question 2

The following list of balances was extracted from the books of Super Maju Enterprise as at 31 December 2021.

RM RM
Purchases 87,250
Sales 152,000
Return inwards 3,000
Return outwards 2,250
Drawings 4,750
Inventory (1 January 2021) 13,000
Buildings 79,750
Motor vehicles (cost RM34,750) 22,150
Fixtures and fittings (cost RM24,250) 19,350
Cash at bank 15,600
Salaries 17,000
Carriage inwards 3,150
Carriage outwards 4,300
Account receivable 29,750
Account payable
14,750
Water and electricity 3,640
Insurance 2,160
Allowance for doubtful debts
500
Discount allowed 150
Discount received
100
Rent revenue
4,250
Rates 3,000
Loan from Affin Bank
24,750
Interest on loan 750
Commission revenue
250
capital
109,900
308,750
3087,50

The following additional information is available as at 31 December 2021:

a) Rent revenue received in advance amounting to RM750.

b) The loan from Affin Bank was taken on 1 July 2021 and the interest charged is 8% per annum. c)
Depreciation:
Motor vehicle -20% per annum on reducing balance method. Fixtures and
fittings – 10% per annum on straight line method.
d) Rate accrued was RM50.
e) Insurance expenses amounting to RM360 is for January 2022. f)
Commission revenue of RM500 was still not received.
g) Provision for doubtful debts should be increased by RM750. h) The
owner took RM1,000 cash to pay his son’s hospital bill. i) Inventory
as at 31 December 2021 is RM19,050.
Required:

a) Prepare Super Maju Enterprise’s Income Statement for the year ended 31 December 2021.
(8 marks)
b) Prepare Super Maju Enterprise’s statement of financial position as at 31 December 2021.
(7 marks)
(Total:15 Marks)

Q2: Answers

a): Sugar Maju Enterprise’s INCOME STATEMENT for the year ending 31 December
2021

RM RM RM
SALES 320,000
(−): Return Inwards −3,000
NET SALES 317,000

(−): COGS
Opening Inventory 13,000
Purchases 87,250
(−): Return Outwards (2,250)
(−): Discount (100) 84,900
Received
(+):Carriage Inwards 3,150
(−): Closing Inventory (19,050)
Cost Of Goods Sold 232,900
GROSS PROFIT 84,100

+: INCOME
Rent Revenue (4,250 3,500
+750)
Commission 750
Received (250 +500)
TOTAL INCOME 4,250

−: EXPENSES
Carriage Outwards 4,300
Salaries 17,000
Water & Electricity 3,640
Insurance (2,160 – 1,800
360)
Rates (3,000 +50) 3,050
Depreciation (Motor 4,430
Vehicles)
Depreciation 2,425
(Fixtures & Fittings)
Doubtful Debts (Affin) 750
Interest On Loan 990
TOTAL EXPENSES 38,385
NET PROFIT 32,175
 b) PROFIT & LOSS STATEMENT

Cost (RM) Accumulated Net Book Value

Depreciation (RM) “Carry Value” (RM)
FIXED ASSETS
(NON-CURRENT
ASSET)
Building 79,750
Motor Vehicle 22,150
Depreciation: Motor (4,430) 17,720
Vehicle (22,150 ×
20%)
Fixtures & Fittings 19,350
Depreciation: (2,425) 16,925
Fixtures & Fittings
(24,250 × 10%)
TOTAL NON- 114,395
CURRENT ASSETS

CURRENT ASSETS
Closing Inventory 19,050
Account Receivables 29,750
(−): Allowance for (500)
Doubtful Debts
(−): Allowance for (750) 28,500
Current Year
Cash At Bank 15,600
Prepaid Insurance 360
Accrued Revenue 500
TOTAL CURRENT 64,010
ASSETS
TOTAL ASSETS 178,405

EQUITY
Capital 109,900
Net Profit 32,715
Drawings (4,750)
TOTAL EQUITY 137,865

LONG TERM
LIABILITIES
Loan From Affi Bank 24,750
TOTAL LONG- 24,750
TERM LIABILITIES

CURRENT
LIABILITIES
Account Payable 14,750
Interest On Loan 240
Rent Received in 750
Advance
Accrued Rates 50
TOTAL CURRENT 15,790
LIABILITIES
TOTAL LIABILITIES 178,405
& EQUITY
Question 3

A. Bonika Sdn Bhd (BSB) manufactures small camping tents. BSB produced 3,000 units during the year. These camping
tents sell for RM150 each. BSB had 500 units in finished goods inventory at the beginning of the year.At the
end of the year,there were 800 units in finished goods inventory. The following information was supplied by its
accountant:

RM
Direct labour cost 10,500
Purchases of raw materials 15,000
Depreciation of machinery 1,000
Insurance expenses 4,500
Factory rent 2,000
Factory supervision 3,000
Utilities expenses 2,500
Indirect labour cost 3,500
Administration salaries 15,000
Sales Commission 12,000
Advertising 20,000
Materials inventory, May 1 6,000
Work in process inventory, May 1 12,000
Finished goods inventory, May 1 2,100
Materials inventory, May 31 8,000
Work in process inventory, May 31 7,000
Finished goods inventory, May 31 800

Additional information:
Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining
amounts should be charged to selling and administrative activities.

Required:
a) Compute prime cost, manufacturing cost and cost of goods manufactured.
(8 marks)
b) Compute cost of goods sold.
(2 marks)
c) Prepare an income statement.
(5 marks)
(Total: 15 Marks)
Q3: Answers

a:

Bonika SDN BHD (BSB) Schedule Balance Prime Expense Total

Of Manufactured Cost For the Cost (RM) Cost (RM) Cost Cost
Month Ended May 31 (RM) (RM)

1) Beginning Raw Materials 6,000

(+): Purchase 15,000

(−): Ending Raw Materials (8,000) 7,000
(Inventory), May 31
Raw Materials Used 13,000
Direct Labor 10,500
Total Prime Cost (Raw Materials + 23,500
Direct Labor)
Manufacturing Overhead: 2,000
a) Factory rent 3,000
b) Factory supervision 1,000
c) Depreciation of machinery 3,500
d) Indirect labour cost 1,750
e) Utilities expense (70% ×
2,500) 14,850
f) Insurance expense (80% × 3,600
4,500)

Manufacturing Cost (Prime Cost +

Total Manufacturing Overhead 38,350
Cost)
12,000
Beginning Work in Progress (7,000) 5000
Ending Work in Progress: (−)

Cost of Goods Manufactured 43,350

(38,350 + 5,000)

b):

Bonika SDN BHD (BSB) Schedule Cost Total Final Cost

Cost Of Goods Sold Month Ended (RM) Cost (RM) (COGS)
May 31
Cost of Goods Manufactured 43,350

Beginning Finished Goods: (+) 2,100

Ending Finished Goods: (−) (800)

Cost Of Goods Sold 44,650s

Working

Unit sold = Beginning Finished Goods + Unit Produced – Ending finished goods
= 500 + 3,000 − 800
= 2,700 units
c):

Bonika SDN BHD (BSB) Income Statement Amount Amount

For Year Ended in May 31.
Sales Revenue (2,700 × 150) 405,000
Cost Of Goods Sold:(−) (44,650)
Gross Margin 360,350
(−): Advertising Expenses (20,000)
Administrative salaries (15,000)
Utilities expense (750)
Insurance expense (20%) (900)
Sales commission (12,000)
Profit 311,700

Question 4

Rania Consultancy runs a training centre in Puchong. The firm charges RM250 per participant. The
estimated fixed cost of Rania Consultancy for the period is RM52,000. The variable costs per participant is
expected to be RM120.The variable costs consist of printed materials, stationery and refreshments. As the
Consultant of Rania Consultancy, find out the following information:

a) The number of participants needed to break even (in unit and in RM).
(3 marks)
b) The number of participants that they must have to earn a profit of RM80,000.
(2 marks)
c) The profit earned if 900 participants are trained in the period.
(2 marks)
d) The fees that Rania Consultancy should charge if the firm wants to earn a profit of RM80,000
from 900 participants, and all the costs remain as stated.
(3 marks)

(Total:10 Marks)

Q4: Answers

¿
a) Break-even point in units = Total ¿Costs
Contribution per unit

RM 52,000
=
( RM 250−RM 120)

RM 52,000
=
RM 130

= 400 participants

Break-even point in RM = Break-even point in units x Sales

= 400 units x RM250

= RM100,000
b) Profit = Total Sales – Total Costs
let y = No. of participant
RM80,000 = (RM250 x y) – RM52,000 + (RM120 x y)
RM80,000 + RM52,000 = (RM250 x y) – (RM120 x y)
RM132,000 = y (RM250 – RM120)
RM132,000 = y (RM130)
RM 132,000
=y
RM 130

y = 1,015.38 ≈ 1,015 participants

c) Profit = Total Sales – Total Costs

= (RM250 x 900) – RM52,000 + (RM120 x 900)
= RM225,000 – (RM52,000 + RM108,000)
= RM 225,000 – RM160,000
= RM65,000

d) Profit = Total Sales – Total Costs

let y = Charges per participant
RM80,000 = (900 x y) – RM160,000
RM80,000 + RM160,000 = 900 x y
RM240,000 = 900 x y
RM 240,000
=y
900

Y = RM266.67

The fees that Rania Consultancy should charge is RM266.67 per participants if the firm wants to
earn a profit of RM80,000 from 900 participants.

***END OF QUESTION