Tutorial Assignment Trade Payables

Tutorial 1

Q1. The following are examples of Payables except:

A. Trade Payables.
B. Notes Payables.
C. Accrued salary and wages.
D. Tax recoverable.

Q2. Which of the following transaction will give rise to trade payables?

A. Salary for the month of December 2018 was outstanding as of 31 December 2018
B. The company purchased 500 units of hand phones from Telco Sdn Bhd on credit.
C. The company obtain a loan from Maybank Finance payable within 24 months..
D. The company declared a final dividend of 2% for the financial year 31 December
2018.

Question 3 to question 5 is referring to the given case base scenario:

Doorian Bhd is in the business of selling fresh fruit juice. On 1 July 2019, the company
purchased 250 boxes of fresh local fruits from Dusun Buah Enterprise costing RM100 per
box. It was agreed that the company will settle 30% the whole amount owing to Dusun Buah
Enterprise upon delivery by cheque and the remaining balance in the following month.

Q3. Which of the following is the correct amount to be settled upon delivery of the fresh
local fruits?

A. RM10,000
B. RM 7,500.
C. RM25,000
D. RM17,500.

Q4. Which of the following amount represents the total amount of the purchase
transaction?

A. RM10,000
B. RM 7,500.
C. RM25,000
D. RM17,500.

Q5. Which is the correct journal entry to record the amount outstanding?

A. Dr Purchases RM 17,500, Cr Bank RM17,500

B. Dr Purchases RM 7,500, Cr Bank RM7,500
C. Dr Purchases RM 25,000, Cr Trade Payables RM25,000
D. Dr Purchases RM 17,500, Cr Trade Payables RM17,500

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 Tutorial Assignment Trade Payables

SECTION B : TRUE OR FALSE QUESTIONS

Indicate whether the statement is ‘TRUE’ or ‘FALSE’.

Q6. Payables should only be recognised as financial asset when and only when it
becomes a party to the contractual provisions of the instrument.
Q7. Trade Payable should be recorded net of trade discount.
Q8. Payables should only be de-recognised when the whole amount outstanding to the
company has been settled.
Q9. Cash discount is usually given when the company buys in bulk from the supplier.
Q10. When a trade payable account is de-recognised, a credit entry should be made to the
respective trade payable account.

SECTION C – Short structured question

Question 1

Cool Lazada purchased 20 units of sofa set from Ah Chan Furniture on credit at a cost of
RM2,500 per unit on 15 December 2018. Ah Chan Furniture provided Cool Lazada with a
trade discount of 2% and credit term of 4/10, n 30. Eight (8) days later, on 23 December
2018, Cool Lazada paid the entire amount due to Ah Chan Furniture using cheque.

Required:
(i) Justify whether Ah Chan Furniture is a financial liability of Cool Lazada according to
MFRS 132.
(ii) Provide the journal entries to record the above transaction on 15 December 2018
and 23 December 2018. (show all workings)

Tutorial 2

Q1. Which of the following is an example of Payable?

A. Prepaid salaries and wages.

B. Notes Payables.
C. Notes receivable.
D. Tax recoverable.

Q2. The following are examples of transactions that would give rise to Trade Payables
except?

A. Electricity bills for the month of November and December 2019 were still outstanding
as at 31 December 2019.
B. The company purchased 5000 units of computers from Techno Sdn Bhd on credit.
C. Don Bhd purchased RM50,000 worth of medical supplies for its private clinic and
made an agreement to settle the payment the following month.
D. Payment to Bake Cake Bhd was to be settled within 60 days for the purchase of
baking equipment worth RM100,000.

Question 3 to question 5 is referring to the given case base scenario:

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 Tutorial Assignment Trade Payables

Logitech Bhd is involved in the business of selling computer and computer accessories. The
following are the transactions with one of its suppliers, Comptech Bhd. The financial year
end of Logitech Bhd is 31 December 2019.

Date Transactions
1 October 2019 Purchased 50 units of laptop costing RM3,000 per unit. Paid deposit
amounting to RM50,000 by cheque. The company was given 45 days
credit term for the balance of the payment. The company was also
given trade discount of 2% and cash discount of 3% if the outstanding
amount was settled within the month of December 2019.
8 December 2019 Logitech Bhd settled the balance outstanding to Comptech Bhd by
cheque.

Q3. Which of the following is the correct amount outstanding payable to Comptech Bhd
on 1 October 2019?

A. RM150,000
B. RM147,000.
C. RM97,000
D. RM50,000.

Q4. Which of the following amount represents the cash discount amount?

A. RM3,000
B. RM2,910.
C. RM5,910
D. RM50,000

Q5. Which is the correct journal entry to record the amount paid on 8 December 2019?

A. Dr Purchases RM 97,000, Cr Bank RM97,000

B. Dr Trade Payable RM 97,000, Cr Bank RM94,090, Cr Discount Received RM2,910
C. Dr Trade Payable RM147,000, Cr Bank RM147,000
D. Dr Trade Payable RM 150,000, Cr Bank RM147,000 Cr Discount Received
RM3,000
(

SECTION B : TRUE OR FALSE QUESTIONS

Indicate whether the statement is ‘TRUE’ or ‘FALSE’.

Q6. Payables can be defined as transfer of economic resources for purchase of products
and services for cash.
Q7. De-recognition refers to an entity shall remove a financial liability (or a part of a
financial liability) from its statement of financial position when, and only when, it is
extinguished ; when the obligation specified in the contract is discharged or cancelled
or expires.
Q8. The initial measurement of financial liability is at its fair value.
Q9. Cash discount should be recorded as a debit entry upon settlement of the trade
payables account.
Q10. Trade discount is recorded as a credit entry when the company purchased a product
in bulk.

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SECTION C – Short structured question

Question 1

Betta Fish Bhd is in the business of selling pet fish supplies. The company usually
purchases its supplies from Aquavest Bhd. On 12 December 2019, the company bought
RM60,000 worth of pet supplies from Aquavest Bhd on a 30 days credit term.

Required:
(i) Justify whether Aquavest Bhd is a financial liability of Betta Fish Bhd according to
MFRS 132.
(ii) Provide the journal entries to record the above transaction on 12 December 2019.

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