CONFIDENTIAL ACIJUN 2015/ACC406 UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION COURSE : INTERMEDIATE FINANCIAL ACCOUNTING AND REPORTING COURSE CODE ACC406 EXAMINATION JUNE 2015 3 HOURS INSTRUCTIONS TO CANDIDATES 1, This question paper consists of two (2) parts: PART A (10 Questions) PART B (4 Questions) 2 ‘Answer ALL questions in the Answer Booklet. Start each answer on a new page. 3 Do not bring any material into the examination room unless permission is given by the invigitator. 4. Please check to make sure that this examination pack consists of i) _ the Question Paper li) an Answer Booklet — provided by the Faculty 5 ‘Answer ALL questions in English DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO This examination paper consists of @ printed pages © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 2 ACIJUN 2015/ACC406 PARTA This part consists of 10 multiple choice questions. Choose the most suitable answer and write down the alphabet representing the answer in your answer booklet. 1. Trade discount on sales should be treated as A. aliability B. arevenue C. anexpense D. none of the above (1 mark) 2, Given a purchase invoice showing 4 items of RMSO each, less trade discount of 10% and cash discount of 5%, if paid within the discount period, your cheque would be made out for RM160 RM171 RM180 RM190 pom> (1 mark) 3. Which of the following relationships about the accounting equation is NOT correct? A Owner's Equity + Liabilities = Assets B. Liabilities + Assets = Owner's Equity C. Assets - Owner's Equity = Liabilities D. Assets - Liabilities = Owner's Equity (1 mark) 4. A decrease in asset is recorded on ___—_ ofthe asset ledger account. A. both sides B. the debit side C. the credit side D. neither side (1 mark) 5. Identify the double entry for the transaction below: Ahmad, the owner of the business took goods for personal use. A. Debit Drawings Credit Goods B. Debit Drawings Credit Purchases C. Debit Goods Credit Drawings D. Debit Purchases Credit Drawings (1 mark) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 3 ACIJUN 2015/ACC406 10. Under the going concer concept, it is assumed that ‘A. _ the business will continue generating profit for the foreseeable future B. the business is planning to sell its assets for the foreseeable future C. the business will only have dealings only with other businesses that are not currently in danger of bankruptcy in the foreseeable future D. _ the business will continue operating in the foreseeable future (1 mark) Which of the following is the first step in the accounting cycle? ‘A. Journal entries are made B. Source documents are prepared C. Atrial balance is prepared D. Postings made to the ledger (1 mark) ‘The excess of net sales over cost of goods sold is recorded as A. Gross profit B. Gross loss C. Net profit D. — Netloss (1 mark) Which of the following will be included in the total current assets? A Accrued rent revenue B. Accrued motor repairs C. Accrued electricity D. Accrued stationeries (1 mark) Below is the information extracted from Kedai Runcit Raju: RM. Net sales 125,000 Gross profit 35,000 Net purchases 70,000 Closing inventories 12,000 Calculate the amount of opening inventories held by Kedai Runcit Raju A RM78,000 B. RM43,000 c. RM32,000 D. —_ RM8,000 (1 mark) (Total: 10 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 4 ACIJUN 2015/ACC408 PARTB QUESTION 1 Below are the profiles of two (2) separate business entities. The businesses are not interrelated to one another. Name of the Business A Business B business Ahmad Enterprise Khakha Couture Sdn Bhd Registration (0001777-x 4547854 -Y number [Registration date | 20 April 2002 20 October 2009 Registered address | 14, Ground Floor, Wisma | 2A-13, Jalan Bersatu, Taman Rampai, 53300 Kuala Lumpur_| Bersatu, 48000 Rawang ‘Owner(s) 1. Ahmad bin Muhammad 1. Khairul Nizam bin Ahmad 2._Khairiah binti Khair Source of financing |7.RM20,000 from own | 1. RM50,000 ordinary shares savings from Khairul Nizam 2, RM30,000 from bank loan | 2. RM30,000 ordinary shares with an interest rate of 10% from Khairiah per annum 3. RM50,000 from bank loan with an interest rate of 5% per annum Business activities [A business related fo printing |A business related to wedding and photocopying. ‘ceremonies such as supplying the wedding attires and accessories, photo shooting and catering, Required: i. Distinguish FOUR (4) characteristics possessed by business A and business B. (8 marks) ji, State THREE (3) accounting concepts applicable for the businesses above. (3 marks) ili, Calculate the value of assets owned by business A and business B. (2 marks) iv. Briefly explain the following terms: a. Capital b. Liability c Assets (3 marks) V. Calculate the interest on loan per annum for business A and business B. (4 marks) (Total: 20 marks) (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,CONFIDENTIAL QUESTION 2 ACIJUN 2015/ACC406 On 1 January 2015, Roberts decided to run a sports equipment business. The transactions which took place during the month of January were as follows: {Transactions “The owner brought a computer into the business amounting to RM5,000. Paid rental RM1,000 cash. Paid cheque for goods purchased amounting to RM8,000. M500 cash was paid for advertising. Paid office supplies RM400 by cheque. ‘Owner took a pair of sport shoes worth RM200 for his own use. Received commission RM750 by cheque. Sold goods to Samsul Trading worth RM1,500 cash. Withdrew cash RM1,200 from the bank account for business purpose. 2)S]o]e|N]o]o1] a} 09/r0 f Use the format given below to answer the question for (a) and (b). Example: ‘The owner brought in further cash of RM78,000 into the business. 1. Purchased motor vehicle on credit. Transaction a)_Effects b) Account to be debited and credited | 1 Asset increase Debit Cash Liability increase Credit Accounts payable Required: a. Identify the effects (increase or decrease) on asset, expense, liability, revenue and owner's equity for each of the transactions above. (10 marks) b. Show the accounts to be debited and credited for each of the transactions above. (10 marks) c. _ State the transactions that should be recorded in Cash Payment Journal. © Hak Cipta Universiti Teknologi MARA (5 marks) (Total: 25 marks) CONFIDENTIALCONFIDENTIAL 6 ACIJUN 2015/ACC406 QUESTION 3 The trial balance below was extracted from the books of Riang Ria Trading as at 31 December 2014. List of accounts [__ Debit (RM) | Credit (RM) Purchases and sales | 300,000 500,000 Returns inwards and outwards | 1,000 540 Opening capital 122,000 Drawings 4,800 Office equipment (cost: RM52,000) 50,000 Furniture and fittings (cost: RM33,200) 16,040 Opening inventories 32,000 | Cash 8,760 Bank 25,960 Accounts receivable and accounts payable 65,000 40,900 | Investments and Bank loan 80,000 10,000 | Dividend on investment 2,000 Bank charges 1,480 Carriages expenses 5,000 Rentals received 6,000 Discounts 400 1,000 Printing and stationery 1,500 Repairs and maintenance 3,700 Electricity and water 600 | Salaries and wages 81,200 Miscellaneous expenses _ 5,000 | Total 682,440 | 682,440 Additional information: 1. Inventories as at 31 December 2014 were valued at RM42,000. 2. Depreciation is to be provided as follows: Non current assets Method of depreciation Depreciation rate Office equipment Straight line balance 5% yearly basis Furniture and fitings Reducing balance 10% yearly basis 3. Interest on loan at 8% per annum was still accrued on 31 December 2014. 4. The dividend on investment was fully received for the year. 5. The accruals and prepayments for the period were as follows: Acer Prepayments Printing and stationery RMS00 Repairs and maintenance RM700 Electricity and water RM400 Salaries and wages RM1,200 © Hak Cipta Universiti Teknologi MARA, CONFIDENTIAL,CONFIDENTIAL, 7 ACIJUN 2015/ACC406 6. The carriage expenses comprise of 60% carriage outwards and 40% carriage inwards. 7. The owner took RM600 cash from the business to buy his clothes. 8 Allowance for doubtful debts was to be adjusted at 5% of net accounts receivable. There were no bad debts to be written off during the year. Required: a. Astatement of profit or loss for the year ended 31 December 2014. (17 marks) b. Astatement of financial position as at 31 December 2014. (13 marks) (Total: 30 marks) QUESTION 4 On 1 January 2014, Mawar, Melly and Meena set up a partnership business, selling printed shawls to customers in the Klang Valley. The partnership agreement contained the following provisions: 1. On 1 January 2014, Mawar and Melly contributed RM40,000 and RM20,000 cash respectively. Meanwhile, Meena brought into the business her used motor vehicle valued at RM70,000. 2. As an active partner, Meena is responsible for managing the daily operations of the business. In return she will receive RM2,000 per month of salary, commencing on 1 March 2014. 3. On31 July 2014, Melly gave an advance of RM30,000 cash into the business. 4, They agreed to share profits and losses in accordance with Section 26 of the Partnership Act 1961. Accrued loan interest on Melly's advance is also per Section 26 of the Partnership Act. 5. Partners are entitled to receive interest on capital contributed of 10% per annum (based on the closing capital balance). 6. Partners will be charged interest of 5% per annum on drawings made, During the year ended 31 December 2014, the gross profit of the business totalled RM110,001 and its total operating expenses amounted to RM44,800. Mawar withdrew RM2,000 and RM6,000 on 1 July 2014 and 30 September 2014 respectively. Meena withdrew RM3,200 on 1 April 2014. © Hak Cipta Universiti Teknologi MARA CONFIDENTIALCONFIDENTIAL 8 ACIJUN 2015/ACC406 Required: a. Appropriation Account for the year ended 31 December 2014. (5 marks) b. Partner's current account (in columnar form) (4 marks) ¢. Partner's Capital Account (in columnar form) (4 marks) 4. — Goodwill is the capability of a business to eam profit in the future. State TWO (2) factors that may give rise to goodwill (2 marks) (Total: 15 marks) END OF QUESTION PAPER (© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL,