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UKAF 1033 Business Accounting 1 Jan 2011 1 Tutorial 1 1. 2. Accounting equation Assets = Capital + Liabilities A L = C - depicts the relationship between assets, liabilities and owner’s equity. - shows the financial position of a business entity at a particular date. - can be presented in the form of balance sheet. - the total of one part is always equal to the total of the other part. Statement of Financial Position as at XXX Assets Liabilities Capital 3. 4.Fatimah

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  • UKAF 1033 Business Accounting 1 Jan 2011

    1

    Tutorial 1

    1.

    2. Accounting equation

    Assets = Capital + Liabilities

    A L = C

    - depicts the relationship between assets, liabilities and owners equity. - shows the financial position of a business entity at a particular date. - can be presented in the form of balance sheet. - the total of one part is always equal to the total of the other part.

    Statement of Financial Position as at XXX

    Assets Liabilities

    Capital

    3.

    4.Fatimah

  • UKAF 1033 Business Accounting 1 Jan 2011

    2

    5. Johari

    6.Kok Heng

    Tutorial 2

    Q.1

    Debited Credited Debited Credited

    (a) Lorry Cash (b) Siti Bank

    (c) Loan from Cash (d) Cash Van

    (e) Machinery Amal (f) Cash Ho

    (g) Bank Siva (h) Bank Capital

    (i) Cash Bala (j) Lam Cash

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    Q.2

    Date Particulars Dr Cr

    Mar 1 Dr Cash 750

    Dr Bank 9,000

    Cr Capital 9,750

    Mar 2 Dr Bank 2,000

    Cr Dala (Loan creditor) 2,000

    Mar 3 Dr Equipment (Computer) 600

    Cr Cash 600

    Mar 5 Dr Equipment (display equipment) 420

    Cr Chin Enterprise 420

    Mar 8 Dr Cash 200

    Cr Bank 200

    Mar 15 Dr Dala 500

    Cr Bank 500

    Mar 17 Dr Chin Enterprise 420

    Cr Bank 420

    Mar 24 Dr Dala 250

    Cr Cash 250

    Mar 31 Dr Equipment (Printer) 200

    Cr Lim 200

    Q.3 Fendy

    Bank Cash

    1 Capital 11000 5 Stationery 62 1 capital 1600 3 purchases 370

    24 Wong 250 16 biz rates 970 4 rent 75

    28 Biz rates 45 19 rent 75 7 wages 160

    28 ben 830 11 rent 75

    28 mardi 415 18 insurance 280

    28 betty 6100 21 motor exp 24

    23 wages 170

    Ben

    28 bank 830 2 Purchases 830 Sales

    6 tam 370

    betty 6 husin 290

    28 bank 6100 20 motor vehi 6100 6 wong 410

    15 lee 205

    mardi 15 sharee 280

    10 returns out 195 2 purchases 610 15 rashid 426

    28 bank 415

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Returns Inwards

    lam 13 husin 35

    2 purchases 590

    Returns outwards

    tam 10 mardi 195

    6 Sales 370

    rent

    husin 4 cash 75

    6 sales 290 13 returns in 35 11 cash 75

    19 cash 75

    wong

    6 Sales 410 24 bank 250 biz rates

    16 Bank 970 28 bank 45

    lee

    15 sales 205 wages

    7 cash 160

    sharee 23 cash 170

    15 Sales 280

    stationery

    rashid 5 Bank 62

    15 sales 426

    insurance

    Capital 18 cash 280

    1 Bank 11000

    1 cash 1600 motor exp

    21 cash 24

    purchases

    2 ben 830 motor vehicle

    2 mardi 610 20 betty 6100

    2 lam 590

    3 cash 370

    Tutorial 3

    1. Joe Trading

  • UKAF 1033 Business Accounting 1 Jan 2011

    5

    2. Kim

    3. Gary

  • UKAF 1033 Business Accounting 1 Jan 2011

    6

    4.

    5. (a) Purpose of day books

    - segregation of duties different bookeepers - provides a means of internal control to prevent fraud - facilitates the location of errors and ensuring accuracy of ledgers

    (b) Sales day book: Invoice

    Purchases day book: Suppliers Invoice Sales return day book: Credit note

    Purchases return day book: Debit note

    Contents:- Date on which each transaction took place

    - Name and contact information of the addressee

    - Details or description relating to the sales/purchases/returns

    transaction (e.g: name of the goods, no. of items).

    - Folio column entry for cross referencing back to the original source

    documents

    - Monetary amounts of the goods

    Tutorial 4

    1.

  • UKAF 1033 Business Accounting 1 Jan 2011

    7

    2. Kedai Runcit Shaari

    3. Purpose of trial balance

    (a) to ascertain whether the total of the accounts with debit balances equals the

    total of the accounts with credit balances (matching credit entry for every debit

    entry).

    (b) to prove arithmetic accuracy of the ledger accounts.

    (c) to assist in the preparation of financial statements.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    4.

  • UKAF 1033 Business Accounting 1 Jan 2011

    9

    Tutorial 5

    1. Trial Balance as at 31 Dec 2007

    RM RM

    Capital 39,980

    Drawings 14,760

    Loan- Public Bank 20,000

    Leasehold premises 52,500

    Motor vehicles 13,650

    Investment 4,980

    Trade debtors 2,630

    Trade creditors 1,910

    Cash 460

    Bank overdraft 3,620

    Sales 81,640

    Purchases 49,870

    Returns outwards 960

    Returns inwards 840

    Carriage 390

    Wages and salaries 5,610

    Rent and rates 1,420

    Light and heat 710

    Telephone and postage 540

    Printing and stationery 230

    Bank interest 140

    Interest received 620

    148,730 148,730

  • UKAF 1033 Business Accounting 1 Jan 2011

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    2

    .

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 6

    1. Cash Book

    Balance b/d 2,740 Bank charges 32

    Beh 201 Gina 93

    Balance c/d 2816

    2,941 2,941

    Bank Reconciliation statement as on 31 March 2008

    Balance as per cash book 2816

    Add: Unpresented cheque 131

    2947

    Less: Lodgements not yet credited 410

    Balance as per bank statement 2537

    2.Hogan

  • UKAF 1033 Business Accounting 1 Jan 2011

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    3. Thomas Lee

    4. King

  • UKAF 1033 Business Accounting 1 Jan 2011

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    5. Han Chung Trading

    (a) Cash Book

    RM RM

    Balance b/f 1,470 Payments (15,520+47) 15,567

    Receipts (15,073-47-18) 15,008 Bank charges 35

    Balance c/f 876

    16,478 16,478

    (b) Bank Reconciliation Statement as on 31 Oct 2007

    RM RM

    Balance as per cash book 876

    Add Unpresented cheques (214+370+30) 614 614

    1,490

    Less Uncredited lodgements 1,542

    Bank error in debiting account 72 1,614

    Balance as per bank statement (124)

    6. Factors causing the differences:-

    (a) Timing differences

    Uncredited lodgements and unpresented cheques

    (b) Omissions and errors Omissions of transactions such as bank charges, standing order, direct debit,

    credit transfer, dishonoured cheque of third parties; and errors in cash book.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 7

    1.

    2.

  • UKAF 1033 Business Accounting 1 Jan 2011

    15

    3.

  • UKAF 1033 Business Accounting 1 Jan 2011

    16

    4.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 8

    1.

    2.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    3.Didi

    4.

    (a) Journal

    Debit Credit

    RM RM

    Bank 500

    Thong 500

    (Being receipt of RM500 towards debt previously written off)

    Thong 500

    Bad debts recovered account 500

    (Being reversal of debt previously written off)

  • UKAF 1033 Business Accounting 1 Jan 2011

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    (b) Provision for doubtful debts

    RM RM

    Balance c/d 1,045 Balance b/d 900

    (22,000-800-300)*5% P+L 145

    1,045 1,045

    (c) Balance Sheet as at 30 Nov 2007

    RM

    Current Asset

    Trade Debtors (22,000-1,100) 20,900

    Less: Provision for doubtful debts 1,045

    19,855

    5.

    .

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 9

    1. Hikmat Trading

  • UKAF 1033 Business Accounting 1 Jan 2011

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    2. Bakti Enterprise

    3. Ori Sdn Bhd

    Rent and Rates

    2006 RM 2006 RM

    1-Jun Prepaid rent b/d 200 1-Jun Accrual rates b/d 340

    1-Jul Bank- Q3 600

    30-Sep Bank- Rates 2,040

    1-Oct Bank- Q4 600

    2007

    1-Jan Bank- Q1 750 31-May P+L (Rates) 2,080

    1-Apr Bank- Q2 750 31-May P+L (Rent) 2,650

    Accrual rates c/d 380 31-May Prepaid rent c/d 250

    5,320 5,320

    1-Jun Prepaid b/d 250 1-Jun Accrual rates b/d 380

    Workings: P+L (Rent) = 7*200 (Jun-Dec'06) +

    5*250 (Jan-May'07)

    = 2,650

    P+L (Rates) = 10*170 (Jun'06-Mar'07) +

    2*190 (Apr'07-May'07)

    = 2,080

    b) Matching principles refers to the assumption that in the measurement of profit,

    costs should be set against the revenue which they generate at the point in time

    when this arises.

    In this case, the rent and rates expenses are matched according to the

    accounting period. Expenses give rise to certain effects which take the form of

    revenue. Matching is thus the determination of profit by attributing specific

    causes to particular effects at the point in time at which the effects occur.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 10

    1. Soon

    Statement of Comprehensive Income for the year ended 31 Dec 2008

    RM RM

    Sales (1000+250+8+3-200) 1,061

    Less: Cost of sales

    Opening stock 200

    Purchases (700+160-180) 680

    880

    less: Closing stock 230 650

    Gross profit 411

    Less: Expenditure

    Rent (8+30-10) 28

    Insurance (12+20+6) 38

    Electricity (25+7-9) 23

    Telephone (10-2-1) 7

    Wages 100

    Discounts allowed 8

    Bad debts written off 3

    Depreciation 50 257

    154

    Statement of Financial Position as at 31 Dec 2008

    RM RM RM

    Fixed assets (350-50) 300

    Current Assets

    Trade debtors 250

    Stock 230

    Bank (20+1000-700-185-50) 85

    Prepayments (10+2) 12

    577

    Less: Current Liabilities

    Accruals (7+6) 13

    Trade creditors 160 173

    Net current assets 404

    704

    Capital

    Balance as at 1 Jan 2008 600

    Add: Net profit 154

    754

    Less: Drawings 50

    704

  • UKAF 1033 Business Accounting 1 Jan 2011

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    2.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 11

    1.

    2.

    3.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    4. Types of error that do not affect the trial balance agreement

    (a) Error of omission

    A transaction is completely omitted from the books.

    (b) Error of principle

    An entry is made in the wrong class of account.

    (c) Error of commission

    An entry is posted to the wrong persons account. (d) Error of original entry

    The double entry principle is correct but error occurs in the original documents

    where the figure is incorrect.

    (e) Complete reversal of entry

    An account that should be credited is debited and vice versa.

    (f) Compensating error Errors occur and cancel each other out.

    Tutorial 12

    1. Regent Sdn Bhd

    a) RM RM

    i) Bank Charges 56

    Cash 56

    ii) Creditors control 400

    Purchases 400

    iii) Debtors control 100

    Sales 100

    iv) Creditors control/ Amin Trading 90

    Purchases 90

    v) Bad debts 88

    Debtors control/ Shanie 88

    vi) Motor expenses 550

    Motor Vehicle 550

    vii) Accumulated Depreciation 55

    Depreciation 55

  • UKAF 1033 Business Accounting 1 Jan 2011

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    b) Statement of Corrected Net Profit for the year ended 31 May 2008

    RM

    Net profit as per draft final account 305,660

    Add: Purchases overcast 400

    Sales undercast 100

    Error in purchases journal 90

    Wrongly accounted depreciation 55 645

    Less: Bank charges 56

    Bad debts 88

    Repair and maintenance 550 694

    305,611

    2.

    3. Gail Dawson

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 13

    1.

    2.

  • UKAF 1033 Business Accounting 1 Jan 2011

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    3.

    4.

    Debtors' Ledger Control

    RM RM

    Balance b/d 7,182 Cash 59,129

    Sales 69,104 Discounts allowed 1,846

    Cash 66 Returns inwards 983

    Interest on overdue account 10 Bills receivable 3,243

    Balance c/d 42 Bad debts 593

    Creditors ledger control 303

    Balance c/d 10,307

    76,404 76,404

    Balance b/d 10,307

    5. Purpose of Control Accounts

    - to provide a check on the accuracy of the ledger

    - to facilitate the location of erros higlighted in the trial balance by pinpointing

    the personal ledger

    - deter fraud and ensure proper segregation of duties

    - facilitate the extraction of balances on creditors and debtors, whereby

    information is obtained immediately from control accounts

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Tutorial 14

    1. Balan

    2. Othman

  • UKAF 1033 Business Accounting 1 Jan 2011

    30

    3. Amal

    Statement of Comprehensive Income for the year ended 31 May 2008

    RM RM

    Sales 405,000

    Less: Cost of sales

    Opening stock 27,400

    Purchases (259,600-1,040) 258,560

    285,960

    less: Closing stock 25,900 260,060

    Gross profit 144,940

    Add: Discounts received 4,420

    Reduction in provision of doubtful debts ([0.5%*46,200]-280) 49

    149,409

    Less: Expenditure

    Discounts allowed 3,370

    Wages and salaries (52,360+140) 52,500

    Bad debts 1,720

    Loan interest 1,560

    Carriage outwards 5,310

    Other operating expenses (38,800-500+200) 38,500

    Depreciation on property (90,000*1%) 900

    Depreciation on equipment (57,500*15%) 8,625

    112,485

    Net profit 36,924

    Statement of Financial Position as at 31 May 2008

    RM RM RM

    Cost Acc. Depn NBV

    Fixed Assets

    Property 90,000 13,400 76,600

    Equipment 57,500 41,125 16,375

    92,975

    Current Assets

    Stock 25,900

    Trade debtors 46,200

    Less: Provision of bad debts 231 45,969

    Cash on hand 151

    Prepayment 500

    72,520

    Less: Current Liabilities

    Bank overdraft 14,500

    Accruals (140+200) 340

    Trade creditors 33,600 48,440

    Net current assets 24,080

    117,055

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Less: Long term liability

    13% loan 12,000

    Net assets 105,055

    Capital

    Balance at 1 June 2007 98,101

    Add: Net profit 36,924

    135,025

    Less: Drawings (28,930+1,040) 29,970

    105,055

    4. Tim

    Statement of Comprehensive Income for the year ended 30 Sep 2007

    RM RM

    Sales 203,845

    Less: Cost of sales

    Opening stock 14,972

    Purchases (167,760-112) 167,648

    182,620

    less: Closing stock 12,972 169,648

    Gross profit 34,197

    Add: Discounts received 955

    35,152

    Less: Expenditure

    Rent (1,350+450) 1,800

    Light and heat (475+136) 611

    Insurance 304

    Salaries 6,352

    Stationery and printing 737

    Telephone and postage 517

    General Expenses (2,044+252) 2,296

    Travellers commission and expenses (9,925+806) 10,731 Discounts allowed 517

    Bad debts written off 331

    Provision for doubtful debts 430

    Depreciation on office furniture and equipment (1,440*10%) 144

    24,770

    Net profit 10,382

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Statement of Financial Position as at 30 Sep 2007

    RM RM RM

    Fixed Assets

    Office furniture and equipment (1,440-144) 1,296

    Current Assets

    Stock 12,972

    Debtors 19,100

    Less: Provision of bad debts 573 18,527

    Bank 6,603

    Petty cash in hand 29

    38,131

    Less: Current Liabilities

    Accruals (450+136+806+252) 1,644

    Trade creditors 8,162 9,806

    Net current assets 28,325

    29,621

    Capital

    Balance at 1 June 2007 24,239

    Add: Net profit 10,382

    34,621

    Less: Drawings (4,888+112) 5,000

    29,621

    5.

    Statement of Comprehensive Income for the year ended 31 Jan 2006

    RM RM RM

    Sales (50,240-300) 49,940

    Less: Return inwards 136

    49,804

    Less: Cost of sales

    Opening stock 13,630

    Purchases 42,400

    less: Return outwards 348 42,052

    55,682

    less: Closing stock (15,450+240) 15,690 39,992

    Gross profit 9,812

    Add: Gain on sales of motor vehicle 40

    9,852

    Less: Expenditure

    Salaries and wages 4,100

    Rent, rates and insurance (860+36-60-10) 826

    Sundry expenses (750+90) 840

    Provision for doubtful debts (340-280) 60

    Bad debts 134

    Depreciation on fixtures and fittings (1400*10%+240*4/12*10%) 148

    Depreciation on motor vehicles ([920-80]*25%) 210

    6,318

    Net profit 3,534

  • UKAF 1033 Business Accounting 1 Jan 2011

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    Statement of Financial Position as at 31 Jan 2006

    RM RM RM

    Fixed Assets

    Fixture and fittings 1,640 148 1,492

    Motor Vehicle 840 210 630

    2,122

    Current Assets

    Stock 15,690

    Sundry debtors (4,610-300) 4,310

    Less: Provision of bad debts 340 3,970

    Prepayments (60+10) 70

    Cash at bank and in hand 3,820

    23,550

    Less: Current Liabilities

    Accruals (36+90) 126

    Sundry creditors 3,852 3,978

    Net current assets 19,572

    21,694

    Capital

    Balance at 1 June 2007 20,760

    Add: Net profit 3,534

    24,294

    Less: Drawings 2,600

    21,694

    Workings: Profit of 20% on sales price

    x =

    100

    240 80

    x = RM300