Question

QUESTION 2 Budi Enterprise is a private investigation business owned by Mr. Budiman. The business is in operation since the last six years, but all accounts and financial statements have been prepared by an external accounting firm. It is your responsibility as a new manager with accounting background to prepare the accounts and financial statements to reduce the business’s cost. It is normal practice for the business where some clients are pay in advance for the company’s services, while other clients make payments after the services have been rendered. Advanced payments from clients are credited to the Unearned Fees account. The balances of the accounts appear in the ledger of Budi Enterprise as at 31 December 2019 are as follows: Accounts (RM) Cash Accounts Receivables Supplies Prepaid Insurance Motor Vehicles Accumulated Depreciation- Motor Vehicles Building Accumulated Depreciation- Building Accounts Payables Unearned Fees Wages Payables Capital, Budiman Drawings, Budiman Revenue Wages Expense Insurance Expense 8,640 2,650 5,350 2,890 45,000 27,000 120,500 43,380 14,990 24,000 1,760 58,000 8,320 46,480 20,180 2,080 The following transactions are related to year-end adjustments: 1. The amount of insurance premiums expired during the year are RM1,240. 2. The estimated useful life for motor vehicles and buildings are 5 years and 10 years respectively. The scrap value for buildings is 10% of the original cost and there is no scrap value for motor vehicles. Budi Enterprise uses straight-line method to depreciate its fixed assets. 3. Wages accrued on December 31 are RM2,840. 4. Supplies on hand at December 31 are RM560. 5. Fees earned but unbilled on December 31 is RM7,500. 6. Unearned fees of RM20,000 is earned at 31 December 2019. BKAL1013 Business Accounting 3 REQUIRED: (a) Prepare the Statement of Profit or Loss and Other Comprehensive Income of Budi Enterprise for the year ended 31 December 2019. (b) Prepare the Statement of Financial Position of Budi Enterprise as at 31 December 2019

Answer 1