Question

Question 4

The following balances were extracted from the books of Pat Pet Shop on 31 December 2019:
Accounts
Amount (RM)
Building
200,000
Motor vehicles
120,000
Plant and machinery
70,000
Profit as at 01.01.2019
10,850
Capital
100,000
Acc depreciation as at 31.12.2019 : Building
60,000
Acc depreciation as at 31.12.2019 : Motor vehicles
69,250
Acc depreciation as at 31.12.2019 : Plant & machinery
40,000
Sales
612,000
Commission revenue
100,000
Purchases
348,000
Sales discounts
5,000
Purchase discounts
3,500
Opening inventory
12,000
Trade receivables
26,700
Trade payable
43,200
Administrative expenses
18,000
Staff training cost
4,000
Bad debts
12,500
Motor expenses
27,000
Rental
90,000
Bank overdraft
13,400
Wages and salaries
115,000
Interest
6,000
Unearned commission for December 2019
2,000
Required:-
Assuming all accounts are in normal balance, prepare the trial balance as at 31 December 2019. [13 marks]

Question 5

After you have prepared the trial balance for Question 4, you notice the following information:-
(i) Telephone bill for December amounting to RM200 has been received but not recorded.
(ii) One day of casual wages amounting to RM125 remains unpaid and unrecorded at December 31; the amount will be included with the first Friday payment in January 2020.
(ii) Included in rental expenses is rental paid for January 2020 amounting to RM2,000.
(iv) Half of the commission revenue has been earned at December 31, 2019.
Required:-
(a) Prepare the adjusting journals. [4 marks]
(b) Prepare the adjusted Trial Balance. [8 marks]

Question 6
Using the trial balance prepared in Question 5, prepare the Statement of Comprehensive Income and Financial Position as at 31 December 2019 for Pat Pet Shop.
The closing inventories for Year 2019 was RM40,000. [20 marks]

Answer 1

Credit Trial Balance as on 31 December 2019 Account Title Debit Building 200000 Motor vehicles 120000 Plant and machinery 70000 Profit as at 01.01.2019 Capital Acc depreciation as at 31.12.2019 Building Acc depreciation as at 31.12.2019 Motor vehicles Acc depreciation as at 31.12.2019 Plant & machinery Sales Commission revenue Purchases 348000 Sales discounts 5000 Purchase discounts Opening inventory 12000 Trade receivables 26700 Trade payables 10850 100000 60000 692501 40000 612000 100000 3500 43200

18000 4000 12500 27000 90000 Administrative expenses Staff training cost Bad debts Motor expenses Rental Bank overdraft Wages and salaries Interest Unearned commission for December 2019 Total 13400 115000 6000 2000 1054200 1054200

Debit Credit 200 200 125 Adjusting entries Date Account Title Telephone expense Dec. 31 Telephone payable Wages expense Dec. 31 Wages payable Prepaid rental Dec. 31 Rental expense Unearned commission ec. 31 Commission earned 125 2000 2000 1000 1000

Adjusted Trial Balance as on 31 December 2019 Account Title Debit Credit Building 200000 Motor vehicles 120000 Plant and machinery 70000 Profit as at 01.01.2019 10850 Capital 100000 Acc depreciation as at 31.12.2019 Building 600001 Acc depreciation as at 31.12.2019 Motor vehicles 69250 Acc depreciation as at 31.12.2019 Plant & machinery 40000 Sales 612000 Commission revenue 101000 Purchases 348000 Sales discounts 5000 Purchase discounts 35001 Opening inventory 12000 Trade receivables 26700 Trade payables 43200 Administrative expenses 18000

4000 12500 27000 88000 13400 Staff training cost Bad debts Motor expenses Rental Bank overdraft Wages and salaries Interest Unearned commission for December 2019 Telephone expense Telephone payable Wages payable Prepaid rental Total 115125 6000 1000 200 200 125 2000 1054525 1054525

RM 607,000 PAT PET SHOP Income Statemet for the year ending 31 December 2019 Income: RM RM Sales 612000 Less Sales discount -5000 Net sales Opening Inventory 12000 Add Purchase 348000 Less Purchase Discount -3500 Net purchase 3445001 Less Closing Inventory -40000 Cost of goods sold Gross profit -316500 290,500

18000 4000 12500 Less Operating expenses Administrative expenses Staff training cost Bad debts Motor expenses Rental Wages and salaries Interest Telephone expense Total operating expenses Operating profit Other income: Commission revenue 27000 880001 115125 6000 200 -270825 19,675 101000 Net Income 120,675

RM PAT PET SHOP Financial Position on 31 December 2019 Current Assets RM RM RM Trade receivables 26,700 Prepaid rental 2,000 Closiny inventory 40,000 Total Current Assets $68,700 Non Current Assets Building 200000 Accumulated Depreciation -60000 140,000 Motor vehicles 120000 Accumulated Depreciation -69250 50,750 Plant and machinery 70000 Accumulated Depreciation -40000 30000 Total Non Current Assets 220,750 Total Assets 289,450

43200 13400 1000 200 125 57,925 Current Liabilities Trade payables Bank overdraft Unearned commission for December 2019 Telephone payable Wages payable Total Current Liabilities Total Liabilities Owners Equity Capital Profit as at 01.01.2019 Add Net Income Profit as at 01.01.2019 Owners Equity Total Liabilities & Owners Equity 57,925 100000 10850 120,675 131,525 231,525 231,525 289,450

Note. Commission received is considered as non operating income.