Question

Question 4 Below was extract from the books of Piko Sdn Bhd for the year ended 31 December 2019. RM Retained profit 31 December 2018 158,000 Inventory 1 January 2019 39,000 Purchases 550,000 Sales 1,292,000 Share capital 120,000 Distribution expenses 116,000 241,000 23,500 400,000 Administration expenses Bad debts 6% bonds (redeemable in Year 2021) Trade receivables Trade payables Allowance for doubtful debts Interest paid on bonds 200,000 73,500 6,000 12,000 Bank 58,000 105,000 Dividends paid Plant and machinery at cost Accumulated depreciation as at 1 January 2019 920,000 215,000 7

Answer 1

Adjustment Debit Credit Adjusted Trial Balance Debit Credit 158,000 554,000 35,000 1,292,000 120,000 7500 4000 123,500 237,000 27,500 4000 400,000 Trial balance as on 31-December-2019 Debit Credit Retained Profit 158,000 Inventory 39,000 Purchases 550,000 Cost of Goods Sold Closing Stock Sales 1,292,000 Share Capital 120,000 Distribution Expenses 116,000 Administration Expenses 241,000 Bad Debts 23,500 6% bonds(redeemable in year 2021) 400,000 Trade Receivables 200,000 Trade Payables 73,500 Depreciation-Plant & Machinery Accrued Distribution Expenses Pre paid administrative expenses Allowance for doubtful debts 6,000 Income Tax Expenses Income Tax Payable Interest paid on bonds 12,000 Bank 58,000 Dividend Paid 105,000 Plant & Machinery at cost 920,000 Accumulated Depreciaiton as at 1st January 2019 215,000 2,264,500 2,264,500 200,000 73,500 92000 92,000 7500 7,500 4000 4,000 4000 10,000 49200 49,200 49200 49,200 12,000 58,000 105,000 920,000 92000 307,000 2,417,200 156,700 156,700 2,417,200 Opening Stock+Purchases-Closing Stock=Cost of Goods Sold Cost of Goods Sold=39000+550000-35000 554,000 Closing Stock 35,000 Adjustment Entry Account Title Depreciation-Plant & Machinery Accumulated Depreciation Debit Credit 92000 92000 7500 Distribution Expenses Accrued Distribution Expenses 7500 4000 Pre paid administrative expenses Administration Expenses 4000 4000 (200000 X 2%) Bad Debts Allowance for doubtful debts 4000 Income Tax Expenses Income Tax Payable 49200 49200 (246000 X 20%) 49200 39,000 Piko Sdn Bhd Income Statement for the year ended 31-December-2019 Sales 1,292,000 Cost of Goods Sold Opening Inventory Purchases 550,000 Closing Inventory (35,000) 554,000 Gross Profit 738,000 Operating Expenses: Selling Expenses: Distribution Expenses 123,500 Bad Debts 27,500 General and Distribution Expenses: Administration Expenses 237,000 Depreciation-Plant & Machinery 92,000 Total Operating Expenses 480,000 258,000 Income from Operations Other Expenses/(Gain): Interest paid on bonds Profit before Tax Less:Income tax Expenses-20% Net Income 12,000 246,000 (49,200) 196,800 Piko Sdn Bhd Balance Sheet as on 31-December-2019 Assets Current Assets Bank 58,000 Trade Receivable 200,000 Allowance for doubtful debts (10,000) Inventory 35,000 Pre paid administrative expenses 4,000 Total Current Assets 287,000 Property Plant & equipment Plant & Machinery Accumulated Depreciation Total Property, Plant & Equipement Total Assets 920,000 (307,000) 613,000 900,000 Liabilities 73,500 Current Liabilities Trade Payables Accrued Distribution Expenses Income Tax Payable Total Current Liabilities 7,500 49,200 130,200 Long Term Liabilities 6% Bonds 400,000 Stock Holders Equity Share Capital Retained Earnings 31st December 2018 Add:Net Income Less:Dividend Paid Total Equity 120,000 158,000 196,800 (105,000) 369,800 Total Liabilities and Stock holder equity 900,000