FINANCIAL ACCOUNTING II. Berjaya Engineering Sdn Bhd produces the following balances from its books at 31 December 20x1:

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Drusilla Chandler
6 years ago
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1 Question 1 Berjaya Engineering Sdn Bhd produces the following balances from its books at 31 December 20x1: Stocks at 1 January 20x1 Raw materials Work-in-progress (factory cost) Finished goods (transfer value) Purchases of raw materials Purchases returns Direct expenses Returns inwards Carriage inwards Rates - Factory Light, heat and power - Factory Wages Direct Indirect Telephone - Factory Factory repairs Insurances - Factory Salaries Factory Office Sales Plant and machinery (at cost) Provision for depreciation of plant and machinery at 1 January 20x1 Bad debts (written off) Sales Furniture and equipment (at cost) Factory Office Provision for depreciation of furniture and equipment at 1 January 20x1 Factory Office 7,450 5,330 12, , ,280 1,215 1,055 5,250 3, ,240 14, ,215 1,420 38,000 27, ,000 64, ,560 42,000 48,000 8,400 9,600 Page 1 of 7

2 Question 1 (continued) The following additional information is available: 1. Closing stocks at 31 December 20x1 are as follows: Raw materials Work-in-progress (factory cost) Finished goods (transfer value) 6,235 6,105 12, At 31 December 20x1, depreciation is to be provided as follows: Plant and machinery - 20% per annum on cost Furniture and equipment - 10% per annum on cost 3. It is the policy of the company to transfer goods manufactured to the warehouse at factory cost plus 15%. Required: Prepare, in vertical format, a. Manufacturing Account b. Trading Account (19 marks) (6 marks) of Berjaya Engineering Sdn Bhd for the year ended 31 December 20x1. (Total 25 marks) Page 2 of 7

3 Question 2 Ben, Mark and Paul are partners sharing profits in the ratio 3:2:1. The partnership Balance Sheet on 31 December 20x1 showed: Fixed Assets Premises Motor Vehicles at net book value Current Assets Stocks Debtors Less Current Liabilities Creditors Bank Overdraft Financed by Capital Accounts Ben Mark Paul Current Accounts Ben Mark Paul 3,700 4,636 7,300 11,100 2,960 10,976 13,936 8,336 10,000 8,000 4,000 2,000 (1,000) 1,000 18,400 5,600 22,000 2,000 On 1 January 20x2 Mark retired, and Claire was admitted as a partner and was to introduce 7,000 cash as capital. Other relevant data: i. Goodwill was valued at 6,000, and a goodwill account is to be raised to deal with this. ii. The premises were revalued at 9,700 and the premises account is to be adjusted to this figure. iii. Mark was to retain a motor vehicle at its book value of 2,800. iv. Mark agreed to take 2,500 in cash and to transfer any further balance due to him to a Loan Account. Page 3 of 7

4 Question 2 (continued) Required: a. Prepare the Capital Accounts of the partners in columnar form. b. Prepare the opening Balance Sheet of Ben, Paul and Claire. (11 marks) (13 marks) (Total 24 marks) Page 4 of 7

5 Question 3 From the following figures, you are required to: a. calculate the closing stock-in-trade value using i. FIFO ii. LIFO (5 marks) (5 marks) b. draw up the trading account for the year showing the gross profits that would have been reported using i. FIFO ii. LIFO (3 marks) (3 marks) (Total 16 marks) Bought Sold Year 20x1 January 10 at 30 each April 8 for 46 each March 10 at 34 each December 12 for 54 each September 20 at 40 each Page 5 of 7

6 Question 4 The balance of laboratory equipment shown in the ledger on 31 October 20x5 is made up as follow: Cost Less Accumulated depreciation Proceeds of sale of laboratory equipment 7, ,270 15,730 The equipment which was sold during the year was purchased on 1 November 20x1 at a cost of 1,500. Depreciation was provided for laboratory equipment at 10% per annum on the reducing balance method. Depreciation is not charged in the year of disposal. No depreciation has yet been provided for accounting year ended 31 October 20x5. Required: To calculate the gain or loss on the sale of the laboratory equipment and show the amounts which would appear in the balance sheet as at 31 October 20x5. (25 marks) Page 6 of 7

7 Question 5 a. The net realisable value of an item of stock is its actual or estimated selling price A. plus all further costs to completion and all costs to be incurred in marketing, selling and distributing the item. B. less all further costs to completion and all costs to be incurred in marketing. C. less all further costs to completion. D. None of the above. b. Any balance brought down on a provision for depreciation account A. should sometimes be included in the trial balance as a debit balance and sometimes as a credit balance. B. should be included in the trial balance as a debit balance. C. should not be included in the trial balance at all. D. should be included in the trial balance as a credit balance. c. Depreciation is A. a way of setting aside money to provide for the eventual replacement of fixed assets B. a way of writing off the cost of fixed assets over their estimated revenuegenerating period C. the writing off of the cost of fixed assets over their estimated useful economic lives in ever decreasing amounts D. the writing off of the cost of fixed assets evenly over their estimated useful economic lives d. A loss incurred upon the disposal of plant and equipment should be A. debited to the provision for depreciation account. B. debited to the profit and loss account. C. credited to the provision for depreciation account. D. credited to the plant and equipment account. e. If prices fall consistently throughout an accounting period, the method of approximating the cost of stock which will give the highest value to closing stock is A. The first in, first out method B. The weighted average cost method C. The last in, first out method D. None of the above (Total 10 marks) 000 Page 7 of 7

FINANCIAL ACCOUNTING II. Alex and Ben have been in partnership for many years, sharing profits and losses equally.

FINANCIAL ACCOUNTING II. Alex and Ben have been in partnership for many years, sharing profits and losses equally. Question 1 Alex and Ben have been in partnership for many years, sharing profits and losses equally. At 30 June 2010, their summarised Balance Sheet was as follows: Fixed Assets Goodwill Premises (at cost)