Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Suggested Solution Question 5: Korina Enterprise

Part A:
1. Rent expenses

2016. Dr- Rent expenses RM 2,400

Dec.31
Cr- Accrued rent expenses RM 2,400
(Being the adjustment of the accrued rent
expenses)

Rent Expenses A/C

2016 RM 2016 RM
Dec-31 Balance b/d 26, 500
Dec-31 Accrued rent 2,400 Dec-31 Profit & Loss 28,600

28,900 28,900

Accrued Rent expenses a/c

2017 RM 2017 RM
Dec-31 Balance c/d 2,400 Dec-31 Rent Expenes 2,400

2,400 2,400

2. Rent received

2016.Dec.31 Dr- Accrued rent received RM 380

Cr- Rent received RM 380
(Being the adjustment of the accrued rent
received)

Rent Received A/C

2016 RM 2016 RM
Dec-31 Profit and Loss 5,980 Dec 31 Balance b/d 5,600
Dec-31 Accrued Rent 380

5,980 5,980

Accrued Rent Received a/c

2016 RM 2016 RM
Dec-31 Rent Received 380 Dec-31 Balance c/d (BS) 380

380 380

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

3. Discount Allowed

2016.Dec.31 Dr- Discount allowed RM 250

Cr- Accrued discount allowed RM 250
(Being the adjustment of the accrued discount
allowed)

Discount Allowed A/C

2016 RM 2016 RM
Dec-31 Balance b/d 3,890 Dec 31 Profit and Loss 4,140
Dec 31 Accrued Discount Allow 250

4,140 4,140

Accrued Discount Allowed a/c

2016 RM 2016 RM
Dec-31 Balance c/d 250 Dec-31 Discount Allowed 250

250 250

4. Discount received

2016.Dec.31 Dr- Accrued discount received RM 700

Cr- Discount received RM 700
(Being the adjustment of the accrued discount
received)

Discount Received A/C

2016 RM 2016 RM
Dec-31 Profit and Loss 2,100 Dec 31 Balance b/d 1,400
Dec-31 Accrued Disc. Receive 700

5,980 5,980

Accrued Rent Received a/c

2016 RM 2016 RM
Dec-31 Discount Received 700 Dec-31 Balance c/d (BS) 700

700 700

5. Prepaid travelling expenses

2016.Dec.31 Dr- Prepaid travelling expenses RM 320

Cr- Travelling allowance expenses RM 320
(Being the adjustment of the prepaid travelling
expenses)

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Travelling Expenses A/C

2016 RM 2016 RM
Dec-31 Balanced b/d 5,680 Dec 31 Prepaid Travelling ex 320
Dec-31 Profit and Loss Acc 5,360

5,680 5,680

Prepaid Travelling Expenses a/c

2016 RM 2016 RM
Dec-31 Travelling Expenses 320 Dec-31 Balance c/d (BS) 320

320 320

6. Cash Drawings

2016.Dec.31 Dr- Drawings RM 1,000

Cr- Cash RM 1,000
(To record cash drawings for personal use)

7. Goods Drawings

2016.Dec.31 Dr- Drawings RM 2,100

Cr- Purchases RM 2,100
(To record took of goods from the business)

Drawings A/C
2016 RM 2016 RM
Dec-31 Balanced b/d 8,600 Dec 31 Balance c/d (BS) 11,700
Dec-31 Cash 1,000
Dec-31 Purchases 2,100
11,700 11,700

Cash a/c
2016 RM 2016 RM
Dec-31 Balance b/d 9,600 Dec-31 Drawings 1,000
Dec-31 Balance c/d (BS) 8,600
9,600 9,600

Purchases a/c
2016 RM 2016 RM
Dec-31 Balance b/d 289,600 Dec-31 Drawings 2,100
Dec-31 Profit and Loss 287,500
289,600 289,600

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

8. Depreciation motor vehicle & Building

2016.dec.31 Dr- Depreciation on motor vehicle RM 7,800

Cr- Accumulated depreciation on motor vehicle RM 7,800
(To record depreciation on motor vehicle in the current
period)

Dr- Depreciation on building RM 1,250

Cr- Accumulated depreciation on building RM 1,250
(To record depreciation on building in the current
period)

Depreciation on Motor Vehicle A/C

2016 RM 2016 RM
Dec-31 Acc. Deprn. On MV 7,800 Dec 31 Profit and Loss 7,800

7,800 7,800

Accumulated Depreciation on Motor Vehicle A/C

2016 RM 2016 RM
Dec-31 Profit and Loss 47,800 Dec 31 Balance b/d 40,000
Dec-31 Depreciation on MV 7,800

47,800 47,800

Depreciation on Building A/C

2016 RM 2016 RM
Dec-31 Acc. Deprn. On MV 1,250 Dec 31 Profit and Loss 1,250

1,250 1,250

Accumulated Depreciation on Building A/C

2016 RM 2016 RM
Dec-31 Balance c/d (BS) 13,750 Dec 31 Balance b/d 12,500
Dec-31 Depreciation on MV 1,250

13,750 13,750

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

9. Inventory

2016.Dec.31 Dr- Inventory RM25,600

Cr- Cost of Goods of Sold RM25,600
(to record to the closing inventory)

Inventory a/c
2016 RM 2016 RM
Dec-31 Cost of Goods Sold 25,600 Dec-31 Balance c/d (BS) 25,600

25,600 25,600

Cost of Goods Sold (Trading Account- Extract only) a/c

2016 RM 2016 RM
Dec-31 Inventory 25,600

10. Opening Accrued General Insurance

2016.Dec.31 Dr- Accrued General Insurance (opening) RM8,100

Cr- General Insurance RM8,100
(to write-off the opening accrued general insurance)

General Insurance Expenses a/c

2016 RM 2016 RM
Dec-31 Balance b/d 36,600 Dec-31 Accrd. Gen. Insurance 8,100
Dec-31 Profit and Loss 28,500
36,600 36,600

Accrued General Insurance Expenses a/c

2016 RM 2016 RM
31 - 12 General Insurance 8,100 1 Janry Balance b/d 8,100

8,100 8,100

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Part B:
Statement of Comprehensive Income:
Miss Korina
Statement of comprehensive income for the year ended 31st December 2016
RM RM RM
Sales 564,000
(-) sales returns (42,500)
Net sales 521,500
Less : Cost of goods sold
Opening inventory 36,560
(+) purchases 287,500
(-) purchases returns (19,700)
(+) import duties 24,000
(+) freight and charges 8,750
Net purchases 300,550
Cost of goods available for sale 337,110
(-) Closing inventory (25,600)
Cost of goods sold 311,510
Gross profit 209,990

(+) other sources of income:

Rent Received 5,980
Discount received 210 8,080
Net income 218,070

(-) operating expenditure :

General and administrative:
General insurance 28,500
Donations 6,600
Telephone and internet 4,680
Rent expenses 28,900
Medical expenses 6,600
Water and electricity expenses 19,900
Travelling allowance expenses 5,360
Maintenance expenses 19,800

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Employees provident fund (EPF) 6,900

Depreciation on building 1,250
Depreciation on furniture 3,600
Quit rent 2,400
Wages and salaries 45,600
Stationeries expenses 2,100 182,190

Selling and distribution:

Insurance on motor vehicle 14,500
Salesman commission 8,600
Depreciation on motor vehicle 7,800
Advertising 9870 40,770

Interest and financing:

Discount allowed 4,140
Interest on loan 4,150
Bad debt 2,980 11,270
Total operating expenditure 234,230
Net loss (16,160)

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Part C:

Miss Korina
Statement of financial position as at 31st December 2016
RM RM RM
Noncurrent Assets:
Building 125,000
(-) Acc. Depreciation for building (13,750) 111,250

Motor vehicle 78,000

(-) Acc. Depreciation for motor vehicle (47,800) 30,200

Furniture 36,000
(-) Acc. Depreciation for furniture (12,000) 24,000

Total non-current assets 165,450

Investments 150,000

(+) current assets:

Cash 8,600
Non-trade debtors 15,600
Trade debtors 64,300
Prepaid water and electricity expenses 1,200
Prepaid travelling expenses 320
Accrued discount received 700
Accrued rent received 380
Closing inventory 25,600
Total currents assets 116,700

(-) current liabilities:

Non-trade creditors 18,960
Trade creditors 71,400
Overdraft bank 14,600
Accrued discount allowed 250
Accrued rent expenses 2,400

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Sulaiman & NorHamizah Final Accounts with Adjustments Nov2018

Accrued wages and salaries 3,400

-
Total current liabilities 111,010

Working capital 5,690

Total net assets 321,140

Financed by:
Owner’s equity:
Opening capital 261,000
(-) net loss (16,160)
(-) drawings (11,700)
closing equity 233,140

Long term liabilities:

Long term loan 88,000
Total Owner’s Equity and Long Term Liabilities 321,140