Question

QUESTION 1

The following list of balances was extracted from the books of Ketumbar Enterprise as at 30 June 2019.
RM
Purchases 84,750
Sales 149,750
Return inwards    3,250
Return outwards 2,250
Drawings 4,750
Inventory (1 July 2018)    12,950
Buildings 79,750
Motor vehicles (cost RM34,750) 22,150
Fixtures and fittings (cost RM24,250) 19,350
Cash at bank 15,600
Salaries 16,550
Carriage inwards 3,150
Carriage outwards 4,300
Account receivable 29,750
Account payable      14,750
Water and electricity 3,640
Insurance 2,160
Provision for doubtful debts 500
Discount allowed 150
Discount received 100
Rent revenue 4,250
Rates 3,000
Loan from Affin Bank 24,750
Interest on loan 750
Commission revenue 250
Capital 109,400

The following additional information is available as at 30 June 2019:
a)   Rent revenue received in advance amounting to RM750.
b)   The loan from Affin Bank was taken on 1 October 2018 and the interest charged is 8% per annum.
c)   Depreciation:
Motor vehicle -20% per annum on reducing balance method.
Fixtures and fittings – 10% per annum on straight line method.
d)   Rate accrued on 30 June 2019 was RM50.
e)   Insurance expenses amounting to RM360 is for July 2019.
f)   Commission revenue of RM500 was still not received as at 30 June 2019.
g)   Provision for doubtful debts should be increased by RM750.
h)   The owner took RM1,000 cash to pay his son’s hospital bill.
i)   Inventory as at 30 June 2019 is RM19,050.
Required:
a)   Prepare Ketumbar Enterprise’s statement of profit and Loss for the year ended 30 June 2019.

b)   Prepare Ketumbar Enterprise’s statement of financial position as at 30 June 2019.
  
(Total:25 Marks)

Answer 1

Ketumbar Enterprise

Statement of Trading & Profit & Loss Account for year ended 30 June 2019

Particulars		Amount	Particulars		Amoumt
To Inventory at the beginning		12950	By Sales		149750
To Purchases		84750	By Return Outwards(Purchase Return)		2250
To Returns Inwards(Sale Returns)		3250	By Closing Inventory		19050
To carriage Inwards		3150
To G.P.		66950
Total		171050	Total		171050
To Drawings		1000	By Gross Profit		66950
To Salary		16550	By Commission Revenue	250
To Provision for Doubtful Debts	500		Add:- Outstanding Commission	500	750
Add:- Increase in Provision of Doubtful Debts	750	1250
To Carriage Outwards		4300	By Discount Received		100
To Water & Electricity		3640	By Rent Revenue	4250
To Insurance	2160		Add:- Rent Received in Advance	750	5000
Less:- Prepaid Insurance	360	1800
To discount Allowed		150
To Rates	3000
Add:- Accrued Rent	50	3050
To Interest on Loan	750
Add:- Interest (note1)	735	1485
To Depreciation:-	4430+2425	6855
To Net Profit		32720
Total		72800	Total		72800

Ketumbar Enterprise

Balance Sheet as at 30.June.2019

Liabilities		Amount	Assets		Amount
Capital			Fixed Assets:-
Capital	109400		Buildings		79750
Less:- Drawings	4750		Motor Vehicles	22150
Less:- Drawings(Son's Hospital Bill)	1000		Less:- Depreciation @ 20%	4430	17720
Add:- Net Profit	32720	136370	Furniture & Fixtures	19350
Non-Current Liabilities:-			Less:- Depreciation @ 10% (Cost 24250)	2425	16925
Loan/Borrowing From Banks	24750		Current Assets
Add:- Interest yet to be Recorded	735	25485	Cash & Cash Equivalents		15600
Current Liabilities:-			Closing Inventory		19050
Rent Received in Advance		750	Accounts Receivable	29750
Accrued Rates		50	Less:- Increase in Provision for Doubtful Debts	750	28500
Accounts Payable		14750	Prepaid Insurance		360
Outstanding Commission		500
Total		177905	Total		177905

Note 1:- Calculation of Interest on Loan:- (from 01.10.2018 till 30.06.2019)

           Interest for the period           24750*8%*9/12 = 1485

           Less:- Interest already Recorded                              750

           Balance to be Recorded                                        735    

Note 2:- The adjustments outside the trial balance will have 2 effects i.e. on Balance Sheet & on Profit & Loss Account as well. However, item in trial balance will only have one effect because it is assumed that items appearing under trial balance are already adjusted under various ledgers.