ACC2124 Mid-Term Test S2/17

Answer both questions.

Question 1

Tan and Lim are in partnership sharing profits and losses in the ratio 3:2 respectively.
The following is their trial balance at 30 June 2017.

Dr. (RM) Cr. (RM)

Building 210, 000
Accumulated depreciation for building 50, 000
Fixtures at cost 8, 200
Provision for depreciation: Fixtures 4, 200
Accounts receivable 61, 400
Accounts payable 26, 590
Cash at bank 6, 130
Opening inventory 62, 740
Sales 363, 111
Purchases 210, 000
Carriage outwards 3, 410
Discount allowed 620
Loan expense 3, 900
Office expenses 4, 760
Salaries and wages 57, 809
Bad debts 1, 632
Provision for doubtful debts 1, 400
Long term loan 65, 000
Capital: Tan 100, 000
Capital: Lim 75, 000
Current: Tan 4, 100
Current: Lim 1, 200
Drawings: Tan 31, 800
Drawings: Lim 28, 200

690, 601 690, 601

Additional information:

(a) Inventory at 30 June 2017 is RM74, 210.

(b) Accrued office expenses RM215, accrued wages RM720.
(c) Fixture is depreciated at 15% reducing balance, building RM5, 000.
(d) Reduce provision for doubtful debts to RM1, 250.
(e) Partnership salary: RM30, 000 to Tan.
(f) Interest on drawings: Tan RM900, Lim RM600.
(g) Interest on capital at 5%.

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ACC2124 Mid-Term Test S2/17

Required:

Prepare an income statement and statement of division of profit for the year ended 30
June 2017 and a statement of financial position at that date.
(5 Marks)

Question 2

The following trial balance was obtained from the books of Alpha Ltd on 31 March 2017.
Dr. (RM) Cr. (RM)
200, 000 Ordinary shares of RM1 each 200, 000
Land and building at cost 170, 000
Accounts receivable 42, 100
Furniture and fittings at cost 80, 000
Accounts payable 25, 000
Closing inventory 42, 000
Bank 12, 000
Gross profit 98, 050
Office salaries and expenses 25, 000
Accumulated depreciation for furniture and fittings 32, 000
Share premium 20, 000
Advertising and selling expenses 5, 000
Bad debts 250
Provision for doubtful debts 600
Retained profit brought forward 12, 000
Directors’ remuneration 11, 300
387, 650 387, 650

Additional information:

(a) The provision for doubtful debts is to be adjusted to RM700.

(b) Depreciation is to be provided in respect of furniture and fittings at 10% on cost.
(c) Final dividend proposed at 10 sen per ordinary share.

Required:

Prepare an income statement and appropriation account for the year ended 31 March
2017 and a statement of financial position at that date.
(5 Marks)

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