FAR110

GROUP ASSIGNMENT 2: PROBLEM BASED

LEARNING

SEMESTER OCTOBER 2020 – FEBRUARY

2021

GROUP MEMBERS STUDENT NO. GROUP

1.
2.
3.
4.
Hijau Rimba Entreprise keeps a complete set of records. The business closes its accounts on 31
October annually. However, some of them were destroyed in August 2020. Therefore, the business is
preparing the records again from available resources.

1. Several staff managed to safe records of previous accounting period and provide you the
Statement of Financial Position as at 31 October 2019.

STATEMENT OF FINANCIAL POSITION AS AT 31 OCTOBER 2019

NON-CURRENT ASSE COST (RM) ACC. DEPRECIATION CARRYING VALUE

(RM) (RM)
Land and building 500,000 - 25,000 475,000
Motor vehicles 80,000 - 8,000 72,000
547,000
CURRENT ASSETS
Inventory 25,300
Account receivable 18,600
bank 80,000
cash 5,000 128,900
675,900

FINANCED BY: OWNER'S EQUITY

Opening capital 450,000
add: net profit 204,000
less: drawings - 3,000
closing capital 651,000

CURRENT LIABILITIES
Account payable 19,900
Short term loan 5,000 24,900
675,900

2. Bank statements for the current accounting periods are also available. The summary in
relation to receipts and payments by cheques and online transactions is as below:

Receipts Amount (RM) NOTE

Interest on fixed deposit 333 The business only received
part of the interest income.
Sales 12,000
Collection from trade debtors - No collection of payment was
made during the accounting
period.
Loan 70,000 The loan was granted to the
business on 1 May 2020. The
business did not pay any
interest on loan at all during
 the year. The amount was
RM1,050.
Payments Amount (RM) NOTE
Utilities 770 RM 840 was still outstanding
at the end of the accounting
period.
Salary & wages 15,000 RM 5,000 was still unpaid at
the end of the year.
Advertisements 6,500
Salesmen’s commission 2,600
Purchases 4,400
Payment to trade creditors - No payment to trade
creditors was made during
the year.
Personal use 8,000
Office equipment 25,000 It was purchased on 25 June
2020 from IKEAH Mall.
Transfer into fixed deposit account 50,000 The interest rate is 4% p.a
and was deposited into the
fixed deposit account on 1
July 2020
Short term loan 5,000 The short term loan was zero-
rated interest loan. The
business fully settled the loan
during the current year.

3. Information on the receipts and payments by cash is also available as follows:

Receipts Amount (RM) NOTE

Commission received 440 The business sold some goods
of other businesses and
received sales commission.
Rental received 600 The business partially rented
out its business premise to
another business.
Payments Amount (RM) NOTE
Transportation charges 590 RM250 was incurred in order
to bring goods to Hijau Rimba
Entreprise from the suppliers’
premises. The balance was
amount incurred to send
goods to the clients.
Medical expenses for staff 880 RM200 was for the next
accounting period.
Repair & maintenance 500 The repair and maintenance
was incurred for the motor
vehicle.
Donations 200
 4. The policy of depreciation charges on the non-current assets are:
a) Building – 5% p.a, yearly basis, straight line method.
b) Motor vehicles – 10% p.a, yearly basis, reducing balance method.
c) Office equipment- 10% p.a, yearly basis, straight line method.

5. Other relevant information for the year ended 31 October 2020 is as shown below:
a) The business owner took some inventories worth RM3,000 for his personal use.
b) The business received cash discounts of RM400.
c) The business returned inventories to the suppliers worth RM800.
d) The business provided cash discounts worth RM600 to its customers.
e) The business issued credit notes worth RM900.

6. As at 31 October 2020, only the following information is available:

a) Inventory RM11,540
b) Trade creditors RM24,000
c) Trade receivables RM21,000

INSTRUCTIONS

A. You are required to prepare the followings:

a) Statement of Profit or Loss for the year ended 31 October 2020
(20 marks)
b) Statement of Financial Position as at 31 October 2020
(20 marks)
Show all workings and round up your calculation to the nearest RM.

B. One of the staff think that it is acceptable not to have a complete set of records since the
business has to incur additional costs to regenerate the financial reports. As a team of
accounting department, discuss:
a) The importance of having a full set of accounts for each accounting period.

(6 marks)

b) The impacts of failing to prepare the full set of accounts.

(4 marks)
(Total: 50 marks)

END OF QUESTION