Glorious Electrical Appliances (GEP) Co. is a company that sells electrical tools. GEP uses perpetual inventory...

 

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Glorious Electrical Appliances (GEP) Co. is a company that sells electrical tools. GEP uses perpetual inventory system in recording its inventory. The financial position of GEP as at 31 December 2016 is as follows: Accounts Cash Accounts Receivable Inventories Office supplies Lorry Accumulated depreciation - Lorry Accounts payable Notes payable Unearned sales revenue Capital Following are transactions occur in 2017. Date 4 January 1 February 23 March 5 April 22 April 6 May 15 May 5 July 23 August 23 September 31 December RM 567,800 243,100 $75,000 16,000 Transactions Mr. Chan, the owner, invested RM20,000 cash as an additional capital to the business. GEP sold 235 units of bulb to customers by cash. The sales price and cost of each bulb is RM5S and RM18 respectively. GEP sold 12 units of microwave on account to Melaka Culinary Institute (MCI). The sales price and cost of each microwave is RM900 and RM750 respectively. The credit term offered to the MCI is 5/30, n/40. 64,700 12,000 GEP purchased 45 units of steam iron from Pensonic Sdn. Bhd. on account. The price of each steam iron is RM1,500. MCI made a payment on the amount owed to GEP. One unit of the steam irons was sent back to Pensonic Sdn. Bhd. due to the non-functional steam button. Pensonic Sdn. Bhd. issued credit memo for the returned steam iron and reduced RM1,500 from the amount owed by GEP. GEP identified the following expenses for 2017: • Rental RM12,000 • Utilities • Staff salary 195,600 337,000 272,000 650,000 GEP made full payment to Pensonic Sdn. Bhd and received RM200 discount for payment made within the discount period. Depreciation - Van GEP paid half of its outstanding accounts payable and notes payable. GEP bought a used van with a value of RM35,000 by cash. RM1,500 RM21,000 RM400 Mr. Chan made a withdrawal of cash amounted RM15,000 for his own personal utilisation. 31 December 31 December Depreciation - Lorry RM1,000 A manual inspection on the office supplies found the remaining balance of office supplies is RM10,000. The outstanding balance of unearned sales revenue as at 31 December is RM100,000. REQUIRED: (a) Prepare journal entries to record the transactions for 2017. (9 Marks) (b) Prepare a Statement of Profit or Loss for GEP Co. for the year ended 31 December 2017. (3 Marks) (c) Prepare a Statement of Owner's Equity for GEP Co. as at 31 December 2017. (2 Marks) (d) Prepare a Statement of Financial Position for GEP Co. as at 31 December 2017. (6 Marks) (e) Distinguish TWO (2) differences between F.O.B Shipping Point and F.O.B Destination. (5 Marks) Glorious Electrical Appliances (GEP) Co. is a company that sells electrical tools. GEP uses perpetual inventory system in recording its inventory. The financial position of GEP as at 31 December 2016 is as follows: Accounts Cash Accounts Receivable Inventories Office supplies Lorry Accumulated depreciation - Lorry Accounts payable Notes payable Unearned sales revenue Capital Following are transactions occur in 2017. Date 4 January 1 February 23 March 5 April 22 April 6 May 15 May 5 July 23 August 23 September 31 December RM 567,800 243,100 $75,000 16,000 Transactions Mr. Chan, the owner, invested RM20,000 cash as an additional capital to the business. GEP sold 235 units of bulb to customers by cash. The sales price and cost of each bulb is RM5S and RM18 respectively. GEP sold 12 units of microwave on account to Melaka Culinary Institute (MCI). The sales price and cost of each microwave is RM900 and RM750 respectively. The credit term offered to the MCI is 5/30, n/40. 64,700 12,000 GEP purchased 45 units of steam iron from Pensonic Sdn. Bhd. on account. The price of each steam iron is RM1,500. MCI made a payment on the amount owed to GEP. One unit of the steam irons was sent back to Pensonic Sdn. Bhd. due to the non-functional steam button. Pensonic Sdn. Bhd. issued credit memo for the returned steam iron and reduced RM1,500 from the amount owed by GEP. GEP identified the following expenses for 2017: • Rental RM12,000 • Utilities • Staff salary 195,600 337,000 272,000 650,000 GEP made full payment to Pensonic Sdn. Bhd and received RM200 discount for payment made within the discount period. Depreciation - Van GEP paid half of its outstanding accounts payable and notes payable. GEP bought a used van with a value of RM35,000 by cash. RM1,500 RM21,000 RM400 Mr. Chan made a withdrawal of cash amounted RM15,000 for his own personal utilisation. 31 December 31 December Depreciation - Lorry RM1,000 A manual inspection on the office supplies found the remaining balance of office supplies is RM10,000. The outstanding balance of unearned sales revenue as at 31 December is RM100,000. REQUIRED: (a) Prepare journal entries to record the transactions for 2017. (9 Marks) (b) Prepare a Statement of Profit or Loss for GEP Co. for the year ended 31 December 2017. (3 Marks) (c) Prepare a Statement of Owner's Equity for GEP Co. as at 31 December 2017. (2 Marks) (d) Prepare a Statement of Financial Position for GEP Co. as at 31 December 2017. (6 Marks) (e) Distinguish TWO (2) differences between F.O.B Shipping Point and F.O.B Destination. (5 Marks)

Answer rating: 100% (QA)

a Journal entries to record the transactions for 2017 4 January Cash Dr 20000 Capital Cr 20000 To record additional capital invested by Mr Chan 1 February Cash Dr 12925 235 x 55 18 Sales Revenue Cr 12... View the full answer