1 BBM205/03

Question 1

Johan’s trial balance at 30 September 2022 is as shown below:

Dr Cr
RM RM
Capital at 1 October 2021 30,217
Stock at 1 October 2021 12,560
Accounts receivable 12,880
Accounts payable and accruals 6,561
Bank 4,754
Sales 90,560
Returns inward 375
Purchases 72,674
Carriage inwards 974
Wages 4,684
Rent 3,200
Stationery 382
Travel 749
Telephone 853
General expenses 753
Drawings 12,500
–––––––– –––––
127,338 127,338
––––––– –––––

The value of Johan’s stock at 30 September 2022 was RM11,875. Johan

has discovered the following errors in the postings:

 An invoice for carriage inwards was posted to the returns inwards account. The
invoice was for RM264.
 A credit sale invoice for RM560 was posted as RM650.
 The telephone bill for the three months to 30 September 2022 which was received
after the year end, has not been included. The bill is for RM297.

Required:

a. Indicate which of the balances in the Trial Balance will be changed by the correction of
the errors, and calculate the corrected balances. (6 marks)

b. Based on the corrected Trial Balance, calculate:

i. the Gross Profit and the Net Profit for the year to 30 September 2022. (7 marks)

ii. the capital balance at 30 September 2022. (2 marks)

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 2 BBM205/03

Question 2

At 30 November 2004, the balance on the accounts receivable control account in Emma’s
nominal ledger was RM39,982. The total of the list of balances on the accounts receivable
personal accounts was RM39,614. Emma has discovered the following
errors:

i. an invoice for RM288 was entered correctly in the nominal ledger, but no entry was
made in the personal account.
ii. a payment of RM1,300 was accepted in full settlement of a balance RM1,309. No
entry was made to record the discount.
iii. a credit note issued to a credit customer for RM120 was incorrectly treated as an
invoice.
iv. an addition error on a personal account meant that the balance was
understated by RM27.
v. a customer lodged a payment of RM325 directly to Emma’s bank account. The
balance on the personal account was adjusted, but no entry was made in the nominal
ledger.
vi. an invoice for RM644 was posted as RM466 in the nominal ledger.
vii. a credit balance of RM47 on a customer’s account was treated as a debit
balance.

Required:

a. Show the accounts receivable control account, including the necessary correcting entries
and the corrected balance. (6 marks)

b. Prepare a reconciliation of the list of balances to the corrected balance on the accounts
receivable control account. (7 marks)

c. State the correct accounts receivable’s balance for inclusion in the final accounts and
indicate where it should be reported on the statement of financial position.
(2 marks)

Question 3

Explain:

a. The difference between non-current assets and current assets. (4 marks)

b. The purpose of the depreciation charge in the profit and loss account.
(4 Marks)

c. The accruals concept. (5 marks)

d. the main reason for preparing a statement of financial position. (2 marks)

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Question 4

Rama calculated his net profit for the year as RM75,886, but is not sure how to treat the
RM90 (debit) balance on the suspense account. Control accounts are not maintained. On
reviewing Rama’s records, it is noted that:

i. a cash sale for RM900 was recorded in the cash book, but no other entry was made.
ii. the purchase daybook was undercast by RM900.
iii. a cheque paid to a supplier was correctly entered in the cash book as RM540, but
RM450 was posted to the supplier’s account.
iv. a cheque received from a customer for RM11,700 was accepted in full settlement of
a balance of RM11,790. No entries were made for the discount.
v. travel expenses include a payment of RM405 for Rama’s holiday.

Required:

a. Indicate whether or not Rama’s calculation of net profit was affected by each of the errors,
and calculate his corrected net profit for the year. (11 marks)

b. Indicate which of the errors are an example of:

 error of omission. (1 mark)

 arithmetical error. (1 mark)
 Error of transposition. (1 mark)
 Error of principle. (1 mark)

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 4 BBM205/03

Question 5

The following balances were extracted from the books of Any Pet Shop on 31
December 2021:

Accounts Amount (RM)

Building 200,000
Motor vehicles 120,000
Office equipment 70,000
Profit as at 01.01.2021 10,850
Capital 100,000
Acc depreciation as at 31.12.2021 : Building 60,000
Acc depreciation as at 31.12.2021 : Motor vehicles 69,250
Acc depreciation as at 31.12.2021 : Office equipment 40,000
Sales 612,000
Commission revenue 100,000
Purchases 348,000
Sales discounts 5,000
Purchase discounts 3,500
Opening inventory 12,000
Trade receivables 26,700
Trade payable 43,200
Administrative expenses 18,000
Staff training cost 4,000
Bad debts 12,500
Motor expenses 27,000
Rental 90,000
Bank overdraft 13,400
Wages and salaries 115,000
Telephone and internet 6,000
Unearned commission for December 2021 2,000
Drawing 10,000
Interest received 2,000
Purchase returns 8,000

Additional Information:

 The depreciation for building and office equipment is charged at 2% and 20% per
annum using the straight line method respectively.
 The depreciation for motor vehicles is charged at 20% per annum using the
reducing balance method.
 The inventory as at 31 December 2021 was RM15,210.

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 5 BBM205/03

Required:

a. Prepare the statement of comprehensive income for the year ended 31

December 2021. (23 marks)

b. Prepare the statement of financial position as at 31 December 2021.

(17 marks]

END OF QUESTION PAPER