BBFA2103

BACHELOR OF ACCOUNTING WITH HONOURS

JAN 2020

BBFA 2103

FINANCIAL ACCOUNTING AND REPORTING 1

NO. MATRIKULASI : 890124075328001

NO. KAD PENGNEALAN : 890124-07-5328
NO. TELEFON : 012-4210124
E-MEL : huini24@oum.edu.my

PUSAT PEMBELAJARAN : SEBERANG JAYA LEARNING

CENTRE

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Title-Cover Page 1

Table of Contents 2

Assignment 1
Question 1 (CLO1)
 Goodwill in a partnership 3

Question 2 (CLO1)
 A) Realisation Account 4
 B) Partner’s Capital Account 5
 C) Other Related Partnership’s Account 6
7

Assignment 2
Question 1(CLO3)
 Internal Control 8
9
10

Question 2(CLO3)
 (A) Straight Line Method 11
 (B) Units-of- Production Method 12

Bibliograph/Reference 13

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ASSIGNMENT 1

Question 1(CLO 1)
Goodwill is a type of reputation that a company builds over time with respect to future profits
expected to exceed normal profits. Goodwill will be created and accounted for when new
partners are introduced into the partnership. This is to compensate existing partners who have
worked in previous businesses. It can be considered in many forms, including reputation,
brand, domain name, intellectual property, and commercial secrets and also is a tangible asset
for a company. [ CITATION Con20 \l 1033 ]

For the example: Tina and Lily expanded their business by admitting June as their new
partner on 1 January 2020.The business made profits of RM3,000,RM4,800 and RM6,000
for last three years. Three of the partner agreed to compute the goodwill by taking two times
the net average net profit over last three years.

Goodwill of the partnership = 2 x (RM3000+RM4800+RM6000) /3

= 2 x (RM13, 800/3)
= 2 x RM4, 600
=RM9, 200

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Question 2 (CLO 1)
A) Realisation Account

      Realisation Account        

31-Mar Plant and Machinery 165,000.00 31-Mar Capital-Lim(Debtors) 165,000.00

31-Mar Motor vehicle 110,000.00 31-Mar Capital-Lim(Plant and Machinery) 165,000.00

25,000.0
31-Mar Furniture Fittings 0 31-Mar Capital-Shah(Motor Vehicle) 85,000.00

31-Mar Inventories 115,000.00 31-Mar Capital-Shah(Inventories) 100,000.00

Debtor
31-Mar s 185,000.00 31-Mar Creditors-(Discount Received) 3,600.00

31-Mar Bank-Dissolution 2,500.00 31-Mar Loss of realisation -Shah 4/8 41,950.00

  31-Mar Loss of realisation -Lim 3/8 31,462.50

  31-Mar Loss of realisation -Arjun 1/8 10,487.50

602,500.00 602,500.00
 
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B) Partner’s Capital Accounts

Partners’ Capital
            Accounts            
Shah Lim Arjun Shah Lim Arjun

69,600.0 290,000.0
31-Mar Balance B/d     0 31-Mar Balance B/d 340,000.00 0

31-Mar Realisation-Debtors   165,000.00   31-Mar Creditors-Shah 54,000.00  

31-Mar Realisation-Plant and Machinery 165,000.00   31-Mar Capital Shah 34/63     43,221.83

31-Mar Realisation-Motor Vehicle 85,000.00     31-Mar Capital Lim 29/63     36,865.67

108,328.1
31-Mar Realisation-Inventories 100,000.00     31-Mar Bank-Final Settlement   7

10,487.5
31-Mar Loss of realisation 41,950.00 31,462.50 0    

31-Mar Capital-Arjun 43,221.83 36,865.67      

31-Mar Bank-Final Settlement 123,828.17        

         

80,087.5 398,328.1
394,000.00 398,328.17 0 394,000.00 7 80,087.50
 

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C) Other Related Partnership Accounts

        Bank Account        
Realisation-Dissolution
31-Mar Balance B/d 18,000.00 31-Mar expenses 2,500.00

108,328.7
31-Mar Capital-Lim 1 31-Mar Capital-Shah 123,828.71
 
 

126,328.7
1 126,328.71
 

        Debtors Account        

185,000.0
31-Mar Balance B/d 0 31-Mar Realisation 185,000.00
 

185,000.0
0 185,000.00
 

        Plant and Machinery Account      

165,000.0
31-Mar Balance B/d 0 31-Mar Realisation 165,000.00
 

165,000.0
0 165,000.00

        Motor Vehicle Account      

110,000.0
31-Mar Balance B/d 0 31-Mar Realisation 110,000.00
 

110,000.0
0 110,000.00

        Furniture and Fitting Account      

31-Mar Balance B/d 31-Mar Realisation
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25,000.00 25,000.00
 

25,000.00 25,000.00

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      Inventories Account        

110,000.0
31-Mar Balance B/d 0 31-Mar Realisation 110,000.00
 

110,000.0
0 110,000.00

        Dissolution Expenses Account      

31-Mar Bank 2,500.00 31-Mar Balance c/d 2,500.00

 

2,500.00 2,500.00

        Creditor Account        

31-Mar Capital- Shah 54,000.00 31-Mar Balance B/d 57,600.00

31-Mar Realisation 3,600.00

57,600.00 57,600.00
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ASSIGNMENT 2
Question 1 (CLO 3)

The use of internal controls is used significantly in various sizes within the
organization. For small businesses, the implementation of internal controls can be a challenge
due to the cost of operations or the employees of an owner with full control over their
organization and operations. Being a responsible manager should have sufficient knowledge
to oversee all aspects of the organization and ensure the safety of all assets accordingly.
Procedures need to be implemented to ensure the assets are detected and used properly.
Internal control also a subset of the accounting system by helping to report on existing assets
and liabilities. Internal control over fixed assets by reducing two different risks. In particular,
risks such as physical properties and related to lost, stolen or damaged assets will adversely
affect their values as reported in the financial statements. [ CITATION CPA08 \l 1033 ]

As a finance staff in our company which a trading business selling the frozen foods,
the methods of the information systems and records are using to identify, assemble, analyses,
calculate, classify, record and report transactions to maintain the accountability for the assets,
liabilities, revenue and expenditures of our company. Not only the computer system are
using, but also include the general accounting, office procedures and other associated systems
such as performance reviews, distribution systems and manufacturing systems.

1) Maintaining Adequate Record

The proper documentation must be kept in filling, including backups to trace all
transactions. The documentation can be paper copies, or documents that are computer
generated and stored, on flash drives or in the cloud. You need to make sure all the finance
transaction will support with related document such as invoices, vouchers or receipts. For the
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example, Purchase Invoices for fixed assets should be separate filling with other expenses for
future tracking.

2) Separating Bookkeeping From Custody of Assets

The company will also prohibit an employee from taking advantage of the accounting
business. Separation of assets from custody ensures that the person in charge of the asset
cannot keep accounting records. For example, someone in an organization may open an
envelope containing checks, but others may enter the check into the organization's accounting
system. You need to make sure the cash amount which collect from sales person is same with
the debtors account in our accounting system. The receipts and statement of account will be
sending on every 5th month to the entire customer.

3) Insuring Assets
The company will also insure the assets purchased. If it is lost or destroyed, the
outsider will reimburse the company for the loss. If an asset is lost to fraud or theft, the
insurance company will investigate the loss and will bring criminal charges against any
employee found involved. For example, let's say a sales person stole $ 10,000 in cash a year.
The insurance company will pay the money but then has the right to claim the charge and
recover the loss from the employee who was caught stealing. You need to make sure all the
assets are insured by insurance company on time.

4) Performing Regular and Independent Reviews

The separation of duties or divisions of employees is an important system of internal
control within the company. The purpose of separating tasks is to ensure a balanced check.
For example, workers who receive stock at the store and the addition of stock will be
segregated to avoid workers stealing / using it for their own use. You need to make sure the
quantity which received by store department is tally with the purchase quantity order by
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purchase department before make payment to supplier. The request form will be submitted by
store department to purchase department to make the order stock. Otherwise, the claim form
also will be filling up to person who wants to claim the medical fees or related expenses.

5) Applying Technological Controls

The use of technology in business is also an important control system in a company
such as cash register. Employees cannot access the system and exchange data without
authorization. The day-to-day activities of the employees can also be easily tracked with the
monitoring room system installer. The store department will submit the quantity physical
count when every 7th month. Finance department will do the internal audit with inventory
system to submit the monthly stock report. Besides that, you also need to check the
attendance records with thumb print records to process the monthly payroll.
[ CITATION Int20 \l 1033 ]
[ CITATION 83D20 \l 1033 ]
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Question 2 (CLO3)
A) Straight Line Method

Straight Line Depreciation Depreciation Amount (C-R)

=
Charges Per Year Estimated useful life (N)

675000
=
5

= 135000

Asset Deprecia Depreciatio Depreciation Accumulated

Carrying
Year Cost tion Rate   n Amount Expenses Depreciation
Amount(RM)
(RM) (RM) (RM) (RM)

1-Jan 750,000  
1st
Year   20% x 675,000 135,000 135,000 615,000
2nd
Year   20% x 675,000 135,000 270,000 480,000
3rd
Year   20% x 675,000 135,000 405,000 345,000

**100% /5 years = 20% per annum or RM675,000 / 5 years =RM 135,000 per annum
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B) Units-of- Production Method

Depreciation per unit Depreciation Amount

=
of Production Estimated total unit of production

675000
=
20000

= 33.75

Asset Carrying Depreciation Accumulated

Depreciatio Carrying
Year Cost   Amount Expenses Depreciation
n Rate Amount(RM)
(RM) (RM) (RM) (RM)

1-Jan 750,000            
1st
Year   33.75 x 3,000 101,250 101,250 648,750
2nd
Year   33.75 x 4,000 135,000 236,250 513,750
3rd
Year   33.75 x 5,000 168,750 405,000 345,000

**Depreciation Rate per unit = (RM675, 000 /20,000 unit) =RM33.75 per unit
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Bibliography
8.3 Describe Internal Controls within an Organization. (1999-2020). Retrieved February 23,
2020, from openstax.org: https://openstax.org/books/principles-financial-accounting/pages/8-
3-describe-internal-controls-within-an-organization
Australia, C. (2008). BUSINESS MANAGEMENT. Internal controls for small business
2008 Update , 6.
Concept of Goodwill. (n.d.). Retrieved February 23, 2020, from www.toppr.com:
https://www.toppr.com/guides/principles-and-practice-of-accounting/treatment-of-
goodwill/concept-of-goodwill/
Internal control examples. (n.d.). Retrieved February 23, 2020, from www.humentum.org:
https://www.humentum.org/free-resources/guide/internal-control-examples
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