TEST1 ACC 106 Nov 2017

Solution

Part A

1 a 6 c
2 b 7 b
3 c 8 a
4 c 9 a
5 d 10 b

Part B

QUESTION 1

a. Identify type of business organization as described above.

Sole proprietorship

b. State TWO (2) characteristics:

a. 1 owner
b. Owner is manager
c. Unlimited liability
d. Losses borne by the single owner
e. Profit enjoyed by the single owner
f. Capital is contributed by the single owner
g. Any other relevant characteristics

c. State TWO (2) accounting concepts applicable to the business.

a. Monetary measurement
b. Separate economic entity
c. Going concern
QUESTION 2

Date Asset Expenses Liability Capital Revenue Debit Credit

1/1 Increase Increase Bank Capital

6/1 Increase Furniture Bank

Decrease
7 Decrease Increase Increase Purchase Bank
AP-Sakura
Trading
12 Increase Increase Cash Sales

13 Increase Increase AR-Pn Sri Sales

Murni
14 Decrease Decrease Return AR-Pn Sri
Inwards Murni
15 Decrease Decrease Xiang Bank
Xing
Trading
25 Increase Increase Bank
Decrease 13000 – AR-Pn Sri
650 = Murni
1235 13000
Discount
allowed
650

OR
i. Bank AR-Pn Sri
Increase 12350 Murni
Decrease 12350

ii. Disc.All AR-Pn Sri

ii.Decrease Increase 650 Murni 650ᴧ

28 Decreas Increas Utility Bank

QUESTION 3

Shea Trading
Statement of Profit or Loss for the year ended 30 September 2017
RM RM RM
Sales 141,000
less: Return inwards (250)
Net Sales 140,750
Less: Cost of sales
Opening inventory 5,000
Purchases 55,000
less: Return outwards (200)
54,800
Duty on purchase 350
Cost of goods available for sale 60,150
Less: Closing inventory (1,500)
Cost of Sales (58,650)
Gross profit 82,100
Add: Incomes
Discount received 330
Rent received 500 830
82,930
Less: Expenses
Discount allowed 280
Printing and stationery 650
Salaries and wages 2,300
Carriage outwards 400
Utilities expenses 1,300
Repair on motor vehicle 500 (5,430)
Net Profit 77,500
 Shea Trading
Statement of Financial Position as at 30 September 2017
RM RM RM
Non-current Assets
Motor vehicle 45,000
Furniture and fittings 35,000
80,000

Current Assets
Account receivable 6,400
Bank 18,000
Cash 2,600
Closing inventory 1,500 28,500
108,500

Financed by:
Owner's Equity
Capital 9,000
Add: Net Profit 77,500
Less: Drawings (1,200)
85,300

Non-current Liabilities
Long-term loan 20,000

Current Liabilities
Account payable 3,200
108,500