Section B: Written Questions (80%)

Question 1

Eco Berhad was a company with a registered capital of RM 800,000 consisting of RM 200,000
9% preferred shares of RM 1 each and RM 600,000 ordinary shares of RM 2 each.
All the preferred shares were issued and fully subscribed.

The following balances extracted in the books of the company at the end-of-period 2016:

Debit Credit
RM RM
Issued And Fully Paid Up Share Capital 600,000
Land And Property (cost of land RM 500,000) 800,000
Motor Vehicles (cost RM 65,000) 55,000
Furniture (cost RM 9,000) 6,200
Investment In Quoted Shares Of GST Limited, At Cost 70,000
Goodwill 9,000
Formation Fees 5,000
Accounts Receivable and Accounts Payable 34,000 21,700
10% Loan Notes (repayable on 31 December 2020) 20,000
Mortgage Loan (secured on property) 15,000
Share Premium 10,000
General Reserve 27,000
Assets Replacement Reserve 16,000
Preferred Shares Dividend 8,000
Ordinary Shares Dividend 14,000
General Administrative Expenses 38,000
General Distribution Expenses 12,600
Finance Expenses 4,900
Miscellaneous Expenses 6,200
Insurance 6,000
Bad Debts 1,000
Allowance For Doubtful Debts 2,720
Rental 4,500
Audit Fees 1,300
Loan Notes Interest 2,000
Inventory, 1 January 2016 5,000
Purchases and Sales 166,000 280,000
Discounts 8,000 6,000
Freight Inwards 3,000
Retained Profits, 1 January 2016 47,000

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Additional information:

① Inventory at 31 December 2016 was RM 6,000.

② Depreciation of the following non-current assets:

Property ── 2% per annum on cost;
Motor Vehicles ── 10% per annum on written down value;
Furniture ── straight line over 5 years with scrap value of RM 600.

③ Allowance for doubtful debts is adjusted at 1% on net sales.

④ Miscellaneous expenses of RM 800 was included in the amount of general administrative

expenses.

⑤ Insurance was paid up to 31 March 2017 for the annual premium of RM 2,400.

⑥ Directors’ emolument of RM 6,420 were charged.

⑦ Dividend from investment of RM 1,500 would be received on 9 January 2017.

⑧ The quoted investment still had a market value of RM 70,000 on the reporting date.

⑨ The directors recommended:

⑦ • increase the general reserve to RM 30,000;
• transfer RM 4,000 to assets replacement reserve;
⑤ • creation of staff pension fund RM 5,000;
⑥ • proposed the remaining dividend for preferred shares;
⑦ • proposed a dividend of RM 0.08 per ordinary share.

You are required to:

(a) prepare the following financial reports for the year ended 31 December 2016:
① Income Statement;
② Statement Of Changes In Equity.

(b) calculate the final dividends on preferred shares and ordinary shares respectively.

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Question 2

On 1 January 2016, Yap started the business with a cash deposit of RM 30,000 in the business
bank account. On the same day, he rented a small shop at an annual rent of RM 12,000.

Although he did not keep a complete set of accounts, the following information was available
for the year ended 31 December 2016:
RM
Proceeds from private investment banked 5,000
Receipts from cash sales banked 2,400
Receipts from customers banked 36,800
Payments to suppliers 22,300
Drawings by cheques 2,100
Credit notes issued to customers 300
Credit notes received from suppliers 220
Purchased of computer 1,800
Shop rent 13,000
Salaries paid to shop assistant 3,500
Insurance 2,400
Electricity 990
Bought of stationery 110
Debit notes received from supplier ── carriage charges 100

Additional information:

① All payments were made by cheques.

All cash takings were banked except for RM 700 which was kept for Yap’s household
expenses, RM 600 for cash purchases and RM 300 for transport expenses.

② One month deposit was included in the shop rent paid.

③ Insurance expenses were paid for half year ended 28 February 2017.
④ Half of the amount of electricity was paid for the owner’s residence, and he had taken
goods costing RM 50 per month from the shop for his personal use.
⑤ At the end-of-period:
RM
Office Equipment 1,305
Inventory of goods 1,180
Trade Receivables 2,900
Trade Payables 4,580
Salaries due unpaid 500

You are required to:

(a) prepare a summarised Bank account showing the closing balance on 31 December 2016.
(b) show Trade Receivables account and Trade Payables account, to find out the total sales
and total purchases for the year.
(c) draw up an Income Statement for the year ended 31 December 2016.
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Question 3

The following is the summary of receipts and payments of the Maze Spa Club for the year
ended 31 December 2016:
Receipts RM Payments RM
Bank Balance, 1 January 2016 960 Cafeteria Purchases 5,500
Cafeteria Takings 7,700 Furniture (includes outstanding Other 2,800
Subscriptions ── 2015 400 Payable at the end of 2015)
Subscriptions ── 2016 8,300 Acquisition Of Equipment 3,000
Subscriptions ── 2017 200 Function Expenses 5,300
Receipts From Function 4,500 General Expenses 1,070
Locker Rental 570 Maintenance Of Spa Ground 860
Sale Of Old Equipment 250 Telephone Charges 420
Refund Of Telephone Charges 120 Cleaning Expenses 1,000
Life Membership Fees 3,300 Honorarium 660
Legacies (for Luxury Spa Facilities) 9,000 Postage And Stationery 290

35,300 20,900

The assets and liabilities of the club were as follows:

1 January 2016 31 December 2016
RM RM
Furniture ── 1,500
Other Payable For Furniture 800 ──
Equipment 2,000 3,900
Cash At Bank 960 ?
Subscriptions In Arrears 500 300
Subscriptions In Advance 100 ?
Accrued General Expenses 300 ──
Prepaid General Expenses ── 130
Accumulated Fund 2,260 ?

All the cafeteria sales and purchases were on cash terms.

During the year, an old equipment at a valuation of RM 400 was sold.

The club had treated 10% of the life membership fees as revenue receipts for the current
accounting year. The balance of the fees was to be considered as part of the club’s fund.

You are required to prepare the following accounts or / and statements:

(a) Subscriptions account.

(b) Income And Expenditure Account for the year ended 31 December 2016.

(c) Statement Of Financial Position as at 31 December 2016.

= = End Of Question Paper = =

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Q2
Bank c/d – RM 28,000
Credit Sales – RM 40,000
Total Sales – RM 44,000
Total Purchases – RM 27,000
Insurance (P&L) – RM 1,600
Electricity (P&L) – RM 495
Salaries (P&L) – RM 4,000
Depreciation on OE – RM 495
Gross Profit – RM 18,000
Net Loss – RM 1,000

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