SOLUTION LECTURE 4 PART 2 : FINANCIAL STATEMENT WITH ADJUSTMENTS
QUESTION 1 (a)
Adjustments
2 Dr Purchase 6,500
Cr Accounts Payable 6,500
3 Dr Fixtures & Fittings 4,000
Cr General Running Expense 4,000
4 Dr Computer repair expense 1,700
Cr Computer repair payable 1,700
Dr Prepaid Salaries & Wages 5,200
Cr Salaries & Wages expense 5,200
5 Dr Interest expense (50,000 X 8% X 9/12) 3,000
Cr Interest Payable 3,000
6 DR Depreciation expense-F&F 4,800
Dr Accumulated Depreciation 4,800
(28,000+4,000) X 15%
Dr Depreciation expense – Computer Equipment 7,000
Cr Accumulated Depreciation 7,000
(40,000-12,000) X 25%
1
Mariam Enterprise
Statement of profit or loss
For the year ended 30 September 2019/
RM RM RM
Revenues
Sales 365,000
Less : Return inwards (8,900)
Net Sales 356,100
Less : Cost of Goods Sold
Opening inventory 33,500
Purchases ( + 6500) 141,500
Less: Return Outwards (4,250)
Net purchases/cost of goods purchased 137,250
Cost of Goods available for sale 170,750
Less : Closing Inventory (36,550) 134,200
Gross Profit 221,900
Add : Other Revenues
Discount received 13,700
Less: Operating expenses
Delivery expenses 18,630
Computer repair expenses ( +1700) 20,850
General running expenses (- 4,000) 27,600
Salaries and wages (- 5,200) 81,500
Marketing costs 14,000
Discount allowed 22,400
Depreciation – F& F (15% x 32,000) 4,800
Depreciation – CE ( 40K – 12K x 25%) 7,000
Interest on loan ( 8% x 50,000 x 9/12) 3,000 (199,780)
Net Income 35820
2
QUESTION 1(b)
Mariam Enterprise
Statement of financial position
As at 30 September 2019/
RM RM RM
Current Assets
Cash 4,070
Bank 10,000
Account receivable 60,000
Inventory 36,550
Prepaid salary and wages 5,200 115820
Non-current liability
Property, plant and equipment
Land and buildings 150,000
Fixtures and fittings ( + 4,000) 32,000
Less: Accumulated depreciation (23,800) 8,200
Computer equipment 40,000
Less: Accumulated depreciation (19,000) 21,000 179,200
TOTAL ASSETS 295,020
Current Liabilities
Account Payable ( + 6500) 37,500
Computer repair payable 1,700
Interest payable ( 3-2) 1,000 40,200
Non-Current liabilities
Long-term loan 50,000
Owner’s Equity
Capital 190,000
Add :Net income 35,820
Less : Drawing (21,000) 204820
TOTAL LIABILITIES AND OWNER’S EQUITY 295,020
3
QUESTION 2
Adjustments
2 Dr Supplies Expense 50,000
Cr Supplies 50,000
3 Dr Interest expense 13,125
Cr Interest payable 13,125
7.5% x 350,000 x 6/12
4 Dr Cash 15,000
Cr Commission Received 15,000
5 Dr Depreciation Expense-Building 4,800
Cr Accumulated Depreciation-Building 4,800
2% x 240,000
Dr Depreciation Expense- Machinery
Cr Accumulated Depreciation-Machinery
(60,000-11,400) x 10%
6 Dr Telephone & Internet expense 1,300
DR Telephone & Internet Payable 1,300
7 Dr Insurance Expense 30,000
Cr Prepaid Insurance 30,000
36,000 x 10/12
4
Clearwater [Link]
Statement of profit or loss
For the year ended 31 December 2018
RM RM RM
Revenues
Sales 980,000
Less : Return inwards (2,000)
Net Sales 978,000
Less : Cost of Goods Sold
Opening inventory 117,200
Purchases 440,000
Add: Carriage inwards 9,600
Net purchases/cost of goods purchased 449,600
Cost of Goods available for sale 566,800
Less : Closing Inventory (50,000) 516,800
Gross Profit/ 461,200
Add : Other Revenues
Commission received 15,000
Less: Operating expenses
Carriage outwards 40,000
Discount allowed 45,000
Salaries expenses 150,000
Bad debts 10,000
Insurance expenses (3,000 x 10) 30,000
Interest expense ( 7.5% x 350000) 26,250
Telephone and internet expense (+1,300) 6,300
Rental and maintenance 36,000
General expenses 55,800
Depre. – Building (2% x 240,000) 4,800
Depre. – Machinery (60k -11400) x10% 4,860
Supplies expense 50,000 459,010
Net income/ 17,190
5
(b)
Cleanwater Sdn. Bhd.
Retained earnings statement
For the year ended 31 December 2018
RM RM RM
Retained earnings, January 1 165,125
Add :Net income 17,190
182,315
Less : Dividends (60,000)
Retained earnings, December 31 122,315
6
(c)
Cleanwater [Link]
Statement of financial position
As at 31 December 2018
RM RM RM
Current Assets
Cash (+ 15,000) 51,000
Account receivable 122,800
Supplies 60,000
Inventory 50,000
Prepaid insurance (2 x 3,000) 6,000 289800
Non- current asset
Property, plant and equipment
Land 900,000
Building 240,000
Less: Accumulated depreciation (76,800) 163,200
Machinery 60,000
Less: Accumulated depreciation (16,260) 43,740 1,106,940
TOTAL ASSETS 1,396,740
Current Liabilities
Account Payable 65,000
Bank overdraft 45,000
Interest payable (26250-13125) 13,125
Telephone and internet payable 1,300 124,425
Long-term liabilities
Long-term loan 350,000
Stockholder’s Equity
Share capital 800,000
Retained earnings 122,315
922,315
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY 1,396,740