Tutorial 11 Preparation of Financial Statements 1 LTJ 2022

Tutorial 11 – Finalised Financial Statements and Closing Entries Cash 3,000

417,000 417,000
Additional exercise
 Trial balance: turn into SPL, SOFP

 Additional information: figure out adjustment, adjusted figure. Additional information:

1. Closing inventory was valued at cost RM25,100 but the market
Section A: value was RM32,900
2. Insurance premium was paid for the year ended 31 December 2021.
Question 1 3. Received rent for the six months ended 30 September 2021
4. An additional amount due from Encik Malik of RM1,600 is to be
Excelsior Trading extracted the following balances from the business written off as bad debts. Allowance for doubtful debts is to be
ledgers as at 31 August 2021: provided at 5% on outstanding trade receivables.
Dr Cr 5. One third of the wages and salaries was paid to warehouse
RM RM employees. One fifth of the carriage expenses was to deliver goods to
Furniture & Fittings 50,000 warehouse
Office Equipment 40,000 6. Received utilities bill RM800 for August 2021, but no payment has
Accumulated depreciation: office equipment 8,000 been made
Motor Vehicles 70,000 7. Depreciation is to be provided as follows:
Accumulated depreciation: motor vehicles 25,200 Furniture & fittings : 20% per annum at cost
Drawings 19,100
Capital 140,000 Office equipment : 20% per annum using
Loan 25,000 straight-line method
Inventory as at 1 September 2020 29,300
Purchases and Sales 89,100 177,300 Motor vehicles : 20% per annum using
Returns 3,800 2,600 reducing-balance method
Carriage 4,500
Wages and salaries 36,000 Additional exercise
Discounts 2,300 1,300  Trial balance (without Additional info): turn into SPL, SOFP.
Rent 4,800
Interest 1,800  Additional information: What is the adjustment for each one?
Insurance 3,600
Utilities 5,000 Required:
Bad debts 1,900 (a) Prepare the Statement of Profit or Loss for Excelsior Trading for the
Trade receivables and payables 46,600 31,300 year ended 31 August 2021.
Allowance for doubtful debts 1,500
Bank 11,000 (b) Prepare the Statement of Financial Position as at that date.
 Tutorial 11 Preparation of Financial Statements 2 LTJ 2022

Question 2:

Slow & Steady Enterprise is operated by Mr. Alan Cool. He provided the Additional information:
following Trial Balance for the year ended 30 June 2021: 1. Closing inventory was valued at RM185,000.
Dr Cr 2. General expenses accrued were RM480 as at year end.
RM RM 3. Alan had been taking goods from the business for his family use
Inventory, 1 July 2020 160,000 during the year amounting to RM500 per month. No recording had yet
8% Long term loan 200,000 been done.
Water and electricity 4,300 4. Commission received outstanding was RM1,000 as at year end.
Bank 6,000 5. Allowance for doubtful debts is to be provided at 2% on trade
Capital 1,000,000 receivables outstanding.
Carriage inwards 1,800 6. Interest on loan has been overlooked by the book-keeper, only
Purchases and Sales 956,000 1,254,600 partly settled.
Cash 8,800 7. Depreciation charges – Motor vehicles (20% on reducing
Allowance for doubtful debts, 1 July 2020 1,000 balance)
Custom duty 3,000 Plant and machinery (15% on cost)
Trade receivables and payables 136,000 68,000 Required:
Bad debts 3,700
Carriage outwards 3,000 Prepare the following for Slow & Steady Enterprise:
Drawings 12,000
Freehold premises 800,000 a) Statement of Profit or Loss for the year ended 30 June 2021;
Motor vehicles 100,000
Plant and machinery 300,000 b) Statement of Financial Position as at 30 June 2021.
Accumulated depreciation: motor vehicles 12,000
Accumulated depreciation: plant & machinery 24,000
General expenses 2,200
Interest on loan 3,500
Discounts 600 800
Advertisement 16,000
Returns 4,500 3,000
Salaries 60,000
Commission received 6,000
2,575,400 2,575,400
 Tutorial 11 Preparation of Financial Statements 3 LTJ 2022

Section B: Extra exercise questions (for students’ own practice)

Additional information:
Question 1 1. Inventory at the end of the accounting year was RM7,035.
2. Salaries and wages outstanding were RM150 and utilities paid in
Charles X is a stationery retailer. The following are the balances extracted advance were RM120.
from his ledger accounts as at 30 June 2021: 3. Non-current assets are to be depreciated as follows:
- Premises at 10% per annum using straight line method
RM RM - Motor vehicles at 15% per annum using reducing balance method
Inventory @ 1 July 2020 5,300 Purchases 41,120 4. Bad debts to be written off amounted to RM700 and the owner has
Repairs and maintenance 900 Sales 51,420 decided to provide an allowance for doubtful debts at 10% of total trade
Salaries and wages 2,300 Returns inwards 1,730 receivables.
Premises at cost 70,000 Returns outwards 2,200 5. Bank loan interest for the year is still outstanding as at year end
Accumulated depreciation Utilities 650 6. Drawings made by Charles for personal use but not recorded in the
: Premises 14,000 Drawings 2,100 books were as follows:
Motor vehicles 56,000 Discount allowed 650 - Goods for resale amounting to RM1,265
Accumulated depreciation Discount received 2,270 - Cash valued at RM1,050
: Motor vehicles 15,540 Advertising 610 7. An error was found in which one third of the carriage inwards should
Insurance on goods purchased 150 Duty on imports 520 be regarded as carriage outwards
Trade receivables (gross) 3,170 Capital 82,350
Trade payables 2,560 Bad debts 400 Required:
Allowance for doubtful debts 290 Rent 1,050 (a) Prepare the Trial Balance (before making the adjustments in the
Commission received 3,200 Bank overdraft 1,200 additional information) as at 30 June 2021;
6% Long term bank loan 16,000 Cash in hand 3,000
Carriage inwards 660 Carriage outwards 720 (b) Prepare Statement of Profit or Loss (after making the adjustments in
the additional information) for the year ended 30 June 2021; and

(c) Statement of Financial Position as at 30 June 2021.

 Tutorial 11 Preparation of Financial Statements 4 LTJ 2022

Question 2:

The following Trial Balance was extracted from the books of Seahorse
Trading, a sole proprietor business, at 30 June 2021:
Additional information:
Dr Cr 1. Inventories as at 30 June 2021 were RM47,342.
RM RM 2. Non-current assets are to be depreciated as follows:
Owner’s equity as at 1 July 2020 86,631 Motor vehicles : 20% per annum on cost
Drawings 8,500 Office equipment : 10% per annum on net book value
Inventories as at 1 July 2020 54,387 3. On 30 June 2021, the owner withdrew cash of RM1,250 for household
Bank 153,246 expenses. No entry has been made in the books.
6% Bank loan repayable in 8 years 80,000 4. Utilities in the Trial Balance include an electricity bill covering the
Trade receivables and payables 45,329 58,128 period 16 June to 15 July 2021 amounting to RM900.
Motor vehicles at cost 60,000 5. Allowance for doubtful debts RM907 is to be provided at the year end.
Accumulated depreciation-motor vehicles 6,000 6. The bank loan was taken on 1 October 2020 and no interest was paid
Office equipment at cost 25,858 during the accounting year.
Accumulated depreciation-office equipment 4,858
Sales and Purchases 386,768 600,235 Required:
Returns 4,586 3,854
Discounts allowed and Discount received 15,844 18,129 (a) Prepare the Statement of Profit or Loss of Omega Shoes for the year
Bad debts 7,287 ended 30 June 2021; and
Allowance for doubtful debts as at 1 July 2020 678
Rent 18,000 (b) Prepare the Statement of Financial Position as at that date.
Insurance – motor vehicles 1,452
– inventories 3,626
Carriage outwards 7,295
Salaries and wages 45,853
Printing and stationery 12,587
Utilities 7,895
858,513 858,513
 Tutorial 11 Preparation of Financial Statements 5 LTJ 2022

Question 3:
Additional information:
The following Trial Balance was extracted from the books of Mr Fujiyama 1. Rent received in arrears as at 31 December 2021 was RM1,000.
as at 31 December 2021: 2. Insurance includes RM2,000 paid for January and February 2022.
3. Depreciation charges are to be provided as follows:
Debit Credit - Motor vehicles at 10% per annum on net book value
RM RM - Buildings at the rate of 1% per annum on cost
Sales and Purchases 68,080 215,580 4. Electricity charges outstanding for the year amounted to RM590.
Returns 220 380 5. Allowance for doubtful debts is to be increased by RM500.
Inventories as at 1 January 2021 18,400 6. Inventories as 31 December 2021 was RM6,520.
Rent received 9,000
Building at cost 520,000 Required:
Advertising expenses 27,600
Trade receivables and Trade Payables 168,000 100,000 Prepare the Statement of Profit or Loss for the year ended 31 December
Salaries and wages 68,000 2021 and the Statement of Financial Position as at that date.
Motor vehicles at cost 100,000
Insurance 24,000
Sundry expenses 15,000
Accumulated depreciation: Motor vehicles 40,000
Accumulated depreciation: Buildings 64,000
Electricity and water 7,100
Allowance for doubtful debts 1,200
Discounts 3,000 7,000
Printing and stationery 2,496
Cash in hand 136,000
Bank overdraft 736
Capital 720,000
1,157,896 1,157,896