Question

The following is the trial balance of AmazeRock Sdn. Bhd. as at 31 December 2019. Debit Credit RM RM Sales 1,077,000 Inventory as at 1 January 2019: Raw materials 16,000 Work-in-progress 11,000 Finished goods 32,000 Purchases of raw materials 720,000 Direct labour 60,000 Carriage inwards 2,000 Direct expenses - royalty 25,000 Factory rental 36,000 Utilities 40,000 Office rental 17,000 Factory supervisor salary 26,000 Administrative salaries 30,000 General administrative expenses 20,000 Plant and machinery 50,000 Office equipment 60,000 Accumulated depreciation as at 1 January 2019: Plant and machinery 10,000 Office equipment 12,000 Ordinary shares 46,000 1,145,000 1,145,000 Additional information: 1. Inventories as at 31 December 2019 were as follows: Raw materials RM26,000 Work in progress RM9,000 Finished goods RM31,000 2. Depreciation of non-current assets is based on the following methods: Plant and machinery 10% per annum on cost Office equipment 12% per annum using reducing balance method Office equipment’s depreciation amounting to RM2,500 is to be allocated to factory and the balance to office. 3. Prepaid factory rental amounted to RM7,000 and accrued general administrative expenses amounted to RM8,000. 4. Total royalties (incurred) for goods manufactured during the year amounted to RM32,500. 5. 60% of utilities expense is to be apportioned to the factory while the remaining 40% is to be apportioned to the administrative department.

Section B Q1. (a) (Continued) Required:

Prepare the following accounts and financial statements for AmazeRock Sdn. Bhd.:

(i) Manufacturing account for the year ended 31 December 2019.

(ii) Statement of profit or loss for the year ended 31 December 2019.

(b) The following were from the accounting books of Fiffy Company for the month of June 2019. CASHBOOK RM RM Balance b/d 5,000 Rania 650 Reen 850 Raisha 780 Utility 200 Balance c/d 4,220 5,850 5,850 Upon investigation, the following were discovered by Sammy:  Payment to Effa creditor has been entered RM 1,500 in the cashbook, but the correct amount was RM 2,030 has been recorded by the bank.  Dividend received of RM1,000 shown in the bank statement have not been entered in the cash book.  Bank charges for the month was RM55  A cheque of RM850 from Reen was not included in the bank Statement as it was dropped in the night depositary after bank hours on 30 June 2019.  A standing order to Telekom for RM150 had been paid by the bank on 28 June 2019 but no entry appeared in the cash book.  Cheques payment amounting RM650 to Rania and RM780 to Raisha were drawn by Fiffy but not yet presented at the bank by the creditors.  A cheque RM500 has been returned by the bank marked “refer to drawer” but it has not been written back in the cash book  The bank statement for the 30 June 2019 showed a balance RM4,565.

Required:

(i) Make any necessary correction in the Cashbook and carry down the updated balance.

(ii) Prepare a bank reconciliation statement for Fiffy Company as at 30 June 2019.

Answer 1

Trial Balance of Amaze Rock Sdn Bhd as at December 2019
Particulrs	Debit	Credit
	RM	RM
Sales		1077000
Raw Material	16000
WIP	11000
Finished goods	32000
Purchase of RM	720000
Direct Labour	60000
Carriage inwards	2000
Royalty	25000
Factory rental	36000
Utilities	40000
OfficeRental	17000
Factory supervisors salary	26000
Administrative salaries	30000
Gen Administration Expenses	20000
Plant and Machinery	50000
Office Equipment	60000
Accumulated Depreciation
Plant and Machinery		10000
OfficeEquipment		12000
Ordinary Shares		46000
Total	1145000	1145000

(i)

Manufacturing Account
Particulars	Amount			Particulars	Amount
	RM	RM			RM
Opening WIP		11000		Closing WIP	9000
Raw material
Opening stock	16000			Trading Account
Add purchase	720000			(transfer of cost of	1852500
Less closingstock	26000	710000		production)
Direct wages		60000
Direct Expense		103000
Prime Cost		884000
Factory Expenses
Depreciation	7500
Factory supervisors salary	26000
Factory rental	36000
Utilities	24000	93500
Total		1861500		Total	1861500

(ii)

Statement of Profit And Loss For year ended December 2019
	RM	RM
Revenue
Sales		1077000
Expenditure
Cost of production	1852500
Depreciation	3260
Royalty	7500
Utiity	16000
OfficeRental	17000
Administrative salaries	30000
Gen Administration Expenses	20000	1946260
Net Profit / (Loss)		(869260)

b(i)

Fifty Company
Correction Entries in the Cash/Bank Book
	Debit	Credit
	RM	RM
Effa	530
Bank		530
Bank	1000
Dividend Received		1000
Bank charges	55
Bank		55
Telekom	150
Bank		150
Bank	500
To creditor		500

b(ii)

Fifty Company
Bank Reconciliation Statement
		RM	RM
	Balance as per cash book		4220
Add	Cheque return	500
	cheues not presented	1430	1930
			6150
Less	Payment to effa creditor	530
	Bank charges	55
	Pament to telekom	150
	cheque from Reen	850	1585
	Balance as per bank book		4565