BBFA1103 INTRODUCTORY ACCOUNTING

JANUARY SEMESTER 2020

ASSIGNMENT

Muhammad Sufian Bin Abd Rahim

IC No: 881130065519
No Matrik: 8811300655199001
ASSIGNMENT 1

Question 1 (CLO 1)

TWO external users of accounting information and explain how that accounting information helps
them in making decisions.

1) Creditors
Suppliers and bankers who want to know if they should extend credit to the business, how much
to extend, and for how long. They will assess the ability of the business to repay loan. The report
that needs to provide is Financial statements of an entity and financial reports are produced
periodically according to a specific format or standards.

2) Government Agencies
For example, Lembaga Hasil Dalam Negeri (LHDN). Need to know the income of a business
entity in order to determine the amount of tax to be collected by them. The report that needs to
provide is Financial statements of an entity and financial reports are produced periodically
according to a specific format or standards.

Question 2 (CLO 1)

Give an example to show how a business adheres to each of the following accounting principles:

a) Historical cost
All transactions must be recorded and accounted for according to their historical cost, in other
word, the original cost incurred at the time of transactions as agreed by both buyer and seller.
For example you buy a land with building at RM 300,00 in 2015,the asset will still recorded at
balance sheet at RM 300,00 although the market value at 2020 is RM 500,00.

b) Revenue recognition
The revenue recognition principle states that one should only record revenue when it has been
earned, not when the related cash is collected. For example, TH aircond completed the aircond
service at GSC for its standard fee of RM 250. The service has been performed and thus the
revenue should be recognised although the cash have not paid yet.
 Question 3 (CLO 1)
Transactio
Assets = liabilities + owners’ Equity
n
furniture
office Motor Account
(Apr. 2019) cash + + & + = + capital
equipment Vehicle Payables
fittings
1 41,000.00                   41,000.00
bal. 41,000.00                   41,000.00
2 (500.00) + 500.00                
bal. 40,500.00 + 500.00         =     41,000.00
(2,500.00
5 + 5,000.00         = 2,500.00    
)
bal. 38,000.00 + 5,500.00         = 2,500.00 + 41,000.00
6         1,900.00       1,900.00    
bal. 38,000.00 + 5,500.00 + 1,900.00     = 4,400.00 + 41,000.00
(700.00)
7 (700.00)                  
Rentals
bal. 37,300.00 + 5,500.00 + 1,900.00     = 4,400.00 + 40,300.00
(5,250.00
8         + 5,250.00        
)
bal. 32,050.00 + 5,500.00 + 1,900.00 + 5,250.00 = 4,400.00 + 40,300.00
(200.00)
15 (200.00)             =     Telephone
Expenses
bal. 31,850.00 + 5,500.00 + 1,900.00 + 5,250.00 = 4,400.00 + 40,100.00
(1,500.00 (1,500.00)
20             =    
) Drawings
bal. 30,350.00 + 5,500.00 + 1,900.00 + 5,250.00 = 4,400.00 + 38,600.00
(1,900.00 (1,900.00
21             =    
) )
bal. 28,450.00 + 5,500.00 + 1,900.00 + 5,250.00 = 2,500.00 + 38,600.00
2,300.00
22 2,300.00             =    
Revenues
bal. 30,750.00 + 5,500.00 + 1,900.00 + 5,250.00 = 2,500.00 + 40,900.00
ASSIGNMENT 2

Question 1 (CLO 2)

a) Statement of Comprehensive Income for the year ended 31 December 2019.

Sole Trader

Statement of Comprehensive Income as at 31 december 2019

  RM RM RM
Net Sales 129,200
   
sales Revenue 130,000  
(-) sales return (600)  
(- )sales discount (200) (800)  
Add Other Income  
(+) Dividend income 2,000  
(+) Interest Income 3,000 5,000
   
Less Cost Of Good Sold 82,750
   
Opening Inventory 23,000  
Add Net Purchase 89,750  
Purchases 90,000  
(-) Purchase Return (300)  
(-) Purchase Discount (250)  
(+) Carriage Inwards 300    
Cost of Goods available for sales 112,750  
Less Closing Inventory (30,000)  
Gross Profit 46,450
  51,450
Less Operating Expenses (45,640)
Motor running expenses (1,200)  
Rent expenses (19,000)  
telephone charges (400)  
wages and salaries expenses (12,140)  
insurance expenses (3,000)  
postage and stamps expenses (100)  
office expenses (1,300)  
sundry expenses (300)  
doubtful debt (200)  
depreciation motor vehicle (3,200)  
depreciation office equipment (4,800)  
Net Profit 5,810
         
b) Statement of Financial Position as at 31 December 2019.

Sole Trader
Statement Of Financial Position as at 31 December 2019
  RM RM RM
Current Assets  
Cash at Bank 3,000  
Cash in hand 400  
Inventory 30,000  
Account Receivable 30,000  
Less Provision of doubtful debt (5,200) 24,800  
prepaid rental 1,000  
Total Current Assets 59,200
   
Non Current Assets  
Motor Vehicle 40,000  
Office Equipment 60,000 100,000  
accumulated depreciation- motor vehicle (11,200)  
accumulated depreciation- office
equipment (16,800) (28,000)  
Total Non Current Assets 72,000
Total Assets 131,200
   
Current Liabilities  
Accounts Payable (12,000)  
wages and salaries payable (140)  
motor running payable (200) (12,340)
Net Assets 118,860
   
Owners Equity  
Capital 121,050  
Net Profit 5,810  
  126,860  
Less Drawings (8,000)  
Closing Capital as at 31 December 2019 118,860