FINAL SEMESTER EXAMINATION

(MARCH 2011 SESSION)

INTRODUCTION TO FINANCIAL ACCOUNTING

DAC1043

LECTURER :……………………………………………………………………………

MATRIC NO : …………………………………………. PROGRAMME : ..……………………………………

VENUE : ………………………………………….

MAY 2011 DURATION : 3 HOURS

INSTRUCTIONS:

1. Candidates must read all questions carefully.

2. The examination script consists of FIVE (5) questions.

3. Answer ALL questions in the answer booklet provided.

THIS EXAMINATION SCRIPT CONTAINS 6 PAGES INCLUDING THE FRONT COVER

DO NOT OPEN THE EXAMINATION SCRIPT UNTIL FURTHER INSTRUCTION
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(100 marks)
Time : 3 hours

INSTRUCTION
Answer ALL questions. Use the answer booklets provided.

1. (a) Briefly explain the following users of accounting information:

i. Investors
(2 marks)

ii. Governmental agencies

(2 marks)

(b) Briefly explain TWO (2) characteristics of the following business

organizations:

i. Sole trader
(2 marks)

ii. Company
(2 marks)

(c) Define the meaning of accrued expenses.

(2 marks)

2. Asmara, a sole trader, started his business on 1 January 2011 under the name of
Asmara Enterprise. The following are his business transactions for the month of
January. All cash transactions refer to cash at bank.

January Transactions RM
1 Started business with cash at bank. 80,000
5 Purchased goods on credit from Zaliya Enteprise. 6,500
10 The owner brought in motor vehicle for business use. 23,000
13 Sold goods to Melati on credit. 6,000
18 Sold goods for cash. 2,000
21 Purchased goods by cheque. 1,500
25 Paid telephone bill by cash. 250
26 Melati returned some of the goods she bought. 800
27 Asmara paid personal house electricity bill by cheque. 500
28 Paid Zaliya Enteprise by cheque. 3,500
30 Received cheque from Melati. 3,000

Required:

(a) Record the above transactions into the relevant accounts in the general
ledger and balance of all the accounts.
(8 marks)

(b) Prepare a Trial Balance as at 31 January 2011.

(7 marks)

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3. Tom, Jerry and Spike are in partnership sharing profit and losses in the ratio of 1:2:2.
The following trial balance was extracted from the accounts of partnership as at 31
December 2010.

Debit Credit
RM RM
Bank 76,160
Debtors 32,010
Creditors 25,300
Inventory (as at 1 January 2010) 18,400
Motor vehicles 85,000
Building 103,000
Land 370,000
5% loan from CIMB Finance 250,000
Sales and purchases 79,060 175,000
Returns outwards 1,060
Carriage inwards 1,100
Advertising 650
Maintenance expenses 230
Rent received 17,500
Discounts 210 450
Salaries and wages 8,500
Electricity, water and telephone expenses 1,250
Miscellaneous expenses 1,800
Petrol 200
Stationery 80
Accumulated depreciation:
- Motor vehicles 5,000
- Building 8,000
Capital accounts:
- Tom 80,000
- Jerry 100,000
- Spike 90,000
Current accounts (as at 1 January 2010)
- Tom 18,340
- Jerry 8,000
- Spike 15,000
Drawing (withdrawn on 1 January 2010)
- Tom 4,000
- Jerry 3,000
- Spike 4,000
Loan from Tom 11,000
796,650 796,650

Prior to the commencement of the business, they have agreed upon the following
matters:

(i) Interest on capital is to be allowed to all partners at 5% per annum.

(ii) Interest is to be charged on all drawings at 5% per annum.

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(iii) Salaries for each partner are as follows:

Tom RM12,000 per annum
Jerry RM10,000 per annum
Spike RM10,000 per annum

(iv) Interest on loan of 10% per annum.

Additional information:

(i) Inventory as at 31 December 2010 is RM15,500.

(ii) The amount of rent received is for 14 months to February 2011.

(iii) Advanced salary paid to the staff amounting of RM500.

(iv) Interest on bank loan from CIMB Finance was not paid yet.

(v) Included in carriage inwards is an amount of RM200 which represent carriage

of goods to customers.

(vi) Depreciation was provided by using the rates as follows:

Motor vehicle 5% (on net book value)
Building 10% (on cost)

Required:

(a) Prepare the Statement of Comprehensive Income and Profit and Loss
Appropriation for the year ended 31 December 2010 (show all workings).
(27 marks)

(b) Prepare the Current Account of the partners in a columnar form.

(8 marks)

(c) Prepare the Statement of Financial Position as at 31 December 2010 (show

all workings).
(14 marks)

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4. The following are the bank account and bank statement of Mickey Enterprise for the
month of January 2011.

Bank Account
January 2011 RM January 2011 RM
1 Balance b/f 5,030 7 Jane - 230075 1000
4 Miney - 230074 520 23 Smith - 230076 440
6 Haikal - 258787 600 29 Jack - 230078 100
14 James - 280217 2,000 30 Matt - 230079 650
22 Jennifer - 000414 360 31 Balance c/f 6,520
29 Whitney - 444600 200
8,710 8,710

Maybank Bank
Bank Statement for the month of 31 January 2011
Date Particular Debit Credit Balance
RM RM RM
Jan 1 Balance b/f 5,030 5,030
5 Cheque - 230074 520 4,510
6 Cheque - 258787 800 5,310
8 Bank charges 50 5,260
10 Cheque - 230075 1,000 4,260
15 Credit transfer 1,900 6,160
18 Standing order 150 6,010
24 Cheque - 000414 360 6,370
30 Cheque - 230078 100 6,270
31 Balance c/f 6,270

Note:

(i) Cheque no. 230074 paid to Miney for RM520 had been wrongly entered in
the cash account as a receipt instead of a payment.

(ii) Cheque no. 258787 received from Haikal amounted RM800 had been
wrongly recorded in the cash account as RM600.

Required:

(a) Prepare the Adjusted Bank Account as a 31 January 2011.

(6 marks)

(b) Prepare the Bank Reconciliation Statement as at 31 January 2011.

(5 marks)

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5. The following information is related to Woody Enterprise for the accounting period
ended 30 April 2011:

RM
Sales 200,000
Cost of goods sold 100,000
Total expenses 55,000
Total income 40,000
Opening inventory 15,000
Closing inventory 19,500
Total Non-Current Asset 380,000
Debtors 30,000
Total Asset 450,000
Total Equity 250,000
Total Non-Current Liabilities 150,000

Calculate and explain the following ratios:

(a) Gross profit margin.

(3 marks)

(b) Net profit margin.

(3 marks)

(c) Current ratio.

(3 marks)

(d) Acid test ratio.

(3 marks)

(e) Debtors’ collection period.

(3 marks)

END OF QUESTION PAPER

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