Question

Question G1

Mr. Tomson has started a trading business, which is a sole distributor of DUNLOP TYRES Malaysia, in SS15, Subang Jaya on 1 December 2019. At the end of first month operation, the following transactions were extracted from the book on 31 December 2019:

2019

Dec      1          Mr. Tomson invested RM100,000 in the company’s bank account as well

as a car worth RM25,000 to start a business.

            3          Bought office fitting RM3,500 on credit from MayTab Business.

            9          Bought goods RM32,500 from supplier by cheque.

            12        Bought stationery RM580 through bank transfer.

            15        Paid RM4,000 by using company’s debit card for the tuition fees of owner’s son.

20        Sold goods 130 tyres (RM140 for each tyre) on credit to Kim Motor and 25 tyres (RM170 for each tyre) on credit to Bintang Car respectively.

22        Paid delivery charges RM450 with personal debit card to City Link Express for the transaction occurred on December 9.

24        Sent 50 tyres to participate in the local car exhibition at Sunway Phyramid. Delivery charges amounted to RM720 was owed to GD Express. No sales transactions were taken place on the day.

26        Received goods 5 tyres returned by Bintang Car.

28        Paid transport RM1,240 by cheque for transaction occurred on December 20.

           

Required:

(a)       Record the following transactions into the ledger and balance off the accounts.                                                                                                                                                                

(b)       Extract a trial balance as at 31 December 2019.                                                ( 4 marks)

Question G2

Mr. Tomson (from question G1) has consulted with you with the following questions:

1. Explain briefly the benefit of current assets to the business in the short

term (less than 12 months), and                                                                            ( 4 marks)

(b)       Explain how will you manage the transaction incurred on December 24?                                                                                                                                                                       ( 3 marks)

(c)       Describe the reason(s) that business spends so much times preparing the

trial balance?                                                                                                        ( 3 marks)

                                                                                                                           (Total = 50 marks)

Answer 1

A. LEDGER

BANK ACCOUNT

CASH	100,000	PURCHASE	32,500
		STATIONERY	580
		PERSONAL DRAWINGS	4,000
		TRANSPORT EXPENSES	1,240
		BALANCE C/D	61,680

VEHICLE - CAR

CASH

25,000

BALANCE C/D

25,000

OFFICE FITTINGS

ACCOUNTS PAYABLE

3,500

BALANCE

3,500

ACCOUNTS PAYABLE

		OFFICE FITTINGS	3,500
		DELIVERY CHARGES	720
BALANCE	4,220

PURCHASE

BANK

32,500

BALANCE

32,500

STATIONERY

BANK

580

BALANCE

580

PERSONAL DRAWINGS

BANK

4,000

BALANCE

4,000

ACCOUNTS RECEIVABLE

SALES TO KIM MOTORS	18,200	SALES RETURN FROM BINTAG	850
SALES TO BINTANG	4,250	BALANCE	21,600

SALES

		ACCOUNT RECEIVABLE - KIM MOTORS	18,200
BALANCE	22,450	ACCOUNT RECEIVABLE - BINTANG	4,250

DELIVERY CHARGES

OWNERS FUND	450	BALANCE	1,170
ACOUNTS PAYABLE	720

OWNERS FUND

BALANCE

450

DELIVERY CHARGES

450

SALES RETURN

ACCOUNTS RECEIVABLE

850

BALANCE

850

TRANSPORTATION EXPENSES

BANK

1,240

BALANCE

1,240

CASH

		BANK	100,000
		VEHICLE -CAR	25,000
BALANCE	125,000

B. TRIAL BALANCE

TITLE	DEBIT	CREDIT
CASH		125,000
BANK	61,680
VEHICLE -CAR	25,000
OFFICE FITTINGS	3,500
PURCHASE	32,500
STATIONERY	580
PERSONAL DRAWINGS	4,000
ACCOUNTS RECEIVABLE	21,600
SALES		22,450
DELIVERY CHARGES	1,170
OWNERS FUND		450
ACCOUNTS PAYABLE		4,220
SALES RETURN	850
TRANSPORTATION EXPENSES	1,240
TOTAL	152,120	152,120