Mr Potential, the owner of Bagus Enterprise, operates his business in Pahang, where he sells clothing...
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Mr Potential, the owner of Bagus Enterprise, operates his business in Pahang, where he sells clothing material. Bagus Enterprise completed the following transaction for December 2020. December I Purchased merchandise totalling RM40,000 from Dele Enterprise, half of the purchase was paid by cash. Credit term is 5/10, n/30. 5 Sold merchandise which worth RM19,400 on cash. Cost of goods sold was RM14,000. 8 Purchased merchandise on credit from Baba Enterprise totalling RM34,000, terms FOB shipping point, 2/10, n/30. The transportation cost of RM800 is not yet added to the invoice. 10 Mr Potential paid Dele Enterprise for the balance outstanding on purchase of December 1. 14 Sold merchandise worth RM9,000 on credit to Utara Enterprise terms 4/10, n/30. Cost of goods sold was RM3,520. Mr Potential paid Baba Enterprise for the purchase made on December 8. Received cash from Utara Enterprise for sale made on December 14. Sold merchandise worth RM24,000 on credit to FEM Enterprise with terms 5/10, n/30. Cost of goods sold was RM11,400. 15 22 24 30 FEM Enterprise returned merchandise totalling RM7,200 purchased on December 24. The cost of these items was RM2,600. REQUIRED: Prepare journal entries for the above transactions based on perpetual inventory system (explanations are not required). B. REQUIRED: (a) (b) (c) Fuad Enterprise specialises in all kind of top-notch customised kitchen wares. The enterprise experienced significant growth in the past eight years since it started trading. Fuad Enterprise receives patronage from giant companies operating in the hospitality industry and government functionaries in Malaysia. The enterprise' management decides to expand its supply to the international market due to its significant market position. Fuad Enterprise, however, is currently experiencing a significant drop in cash flow due to the pandemic. Before the pandemic, most of enterprise customers buy on account, and it takes 70 days on the average to settle their account. Furthermore, the merchandise turnover is very slow. Fuad Enterprise notices a drop in cash flow, which requires the management strategies in order to improve its current challenges. The management seek advice from you for further details. (d) Discuss TWO (2) factors that could have contributed to the drop in Fuad's enterprise cash flow. (2 Marks) Suggest any TWO (2) discount methods for Fuad Enterprise's management to improve their cash flow. (1 Mark) Explain how the TWO (2) discounts identified in (b) above would solve the challenges that Fuad Enterprise is facing. (4 Marks) Explain the accounting treatment to record the TWO (2) discount methods suggested in (b) in the books of account. (2 Marks) C. 2. 2345 4. 5. Happy Hour Sdn Bhd (HHSB) manufacturers high-quality guitars that combine innovation with high-quality craftsmanship. The following information was taken from the company's accounting records for the year ended 31 December 2020 RM Items Advertising expenses Utilities expense Direct labour cost Depreciation expense Purchase of raw materials Sales Insurance expense Indirect materials Administrative expenses Indirect labour Maintenance and repair Sales commission Rental expense (c) 3 Raw materials Work in process Finished goods Additional information: 1. Insurance, utilities and depreciation expenses consist of 70% for factory and 30% for office. Only half of the maintenance and repair cost belongs to the factory. Rental expense includes RM37,000 of office rental. Production in 2019 was 50,000 unit. Inventory balances at the beginning and ending of the year 2020 were: January 1 (RM) 65,000 150,000 235,000 100,000 36,000 150,000 145,000 800,000 2,450,000 (b) Explain what is cost object and provide ONE (1) example. BKAF1023 INTRODUCTION TO FINANCIAL ACCOUNTING 40,000 15,000 199,000 170,000 94,000 Differentiate between conversion cost and prime cost. 12,000 77,000 December 31 (RM) 78,000 112,000 215,000 REQUIRED: Prepare the Statement of Cost of Goods Manufactured for the year ended 31 December 2020 (show your working). (11 Marks) (2 Marks) (2 Marks) Mr Potential, the owner of Bagus Enterprise, operates his business in Pahang, where he sells clothing material. Bagus Enterprise completed the following transaction for December 2020. December I Purchased merchandise totalling RM40,000 from Dele Enterprise, half of the purchase was paid by cash. Credit term is 5/10, n/30. 5 Sold merchandise which worth RM19,400 on cash. Cost of goods sold was RM14,000. 8 Purchased merchandise on credit from Baba Enterprise totalling RM34,000, terms FOB shipping point, 2/10, n/30. The transportation cost of RM800 is not yet added to the invoice. 10 Mr Potential paid Dele Enterprise for the balance outstanding on purchase of December 1. 14 Sold merchandise worth RM9,000 on credit to Utara Enterprise terms 4/10, n/30. Cost of goods sold was RM3,520. Mr Potential paid Baba Enterprise for the purchase made on December 8. Received cash from Utara Enterprise for sale made on December 14. Sold merchandise worth RM24,000 on credit to FEM Enterprise with terms 5/10, n/30. Cost of goods sold was RM11,400. 15 22 24 30 FEM Enterprise returned merchandise totalling RM7,200 purchased on December 24. The cost of these items was RM2,600. REQUIRED: Prepare journal entries for the above transactions based on perpetual inventory system (explanations are not required). B. REQUIRED: (a) (b) (c) Fuad Enterprise specialises in all kind of top-notch customised kitchen wares. The enterprise experienced significant growth in the past eight years since it started trading. Fuad Enterprise receives patronage from giant companies operating in the hospitality industry and government functionaries in Malaysia. The enterprise' management decides to expand its supply to the international market due to its significant market position. Fuad Enterprise, however, is currently experiencing a significant drop in cash flow due to the pandemic. Before the pandemic, most of enterprise customers buy on account, and it takes 70 days on the average to settle their account. Furthermore, the merchandise turnover is very slow. Fuad Enterprise notices a drop in cash flow, which requires the management strategies in order to improve its current challenges. The management seek advice from you for further details. (d) Discuss TWO (2) factors that could have contributed to the drop in Fuad's enterprise cash flow. (2 Marks) Suggest any TWO (2) discount methods for Fuad Enterprise's management to improve their cash flow. (1 Mark) Explain how the TWO (2) discounts identified in (b) above would solve the challenges that Fuad Enterprise is facing. (4 Marks) Explain the accounting treatment to record the TWO (2) discount methods suggested in (b) in the books of account. (2 Marks) C. 2. 2345 4. 5. Happy Hour Sdn Bhd (HHSB) manufacturers high-quality guitars that combine innovation with high-quality craftsmanship. The following information was taken from the company's accounting records for the year ended 31 December 2020 RM Items Advertising expenses Utilities expense Direct labour cost Depreciation expense Purchase of raw materials Sales Insurance expense Indirect materials Administrative expenses Indirect labour Maintenance and repair Sales commission Rental expense (c) 3 Raw materials Work in process Finished goods Additional information: 1. Insurance, utilities and depreciation expenses consist of 70% for factory and 30% for office. Only half of the maintenance and repair cost belongs to the factory. Rental expense includes RM37,000 of office rental. Production in 2019 was 50,000 unit. Inventory balances at the beginning and ending of the year 2020 were: January 1 (RM) 65,000 150,000 235,000 100,000 36,000 150,000 145,000 800,000 2,450,000 (b) Explain what is cost object and provide ONE (1) example. BKAF1023 INTRODUCTION TO FINANCIAL ACCOUNTING 40,000 15,000 199,000 170,000 94,000 Differentiate between conversion cost and prime cost. 12,000 77,000 December 31 (RM) 78,000 112,000 215,000 REQUIRED: Prepare the Statement of Cost of Goods Manufactured for the year ended 31 December 2020 (show your working). (11 Marks) (2 Marks) (2 Marks)
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Journal entries of Mr Potential for the dec2020 Date Particulars Dr Cr Dec 1 Stock Ac dr 4000... View the full answer
Related Book For
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-0071317658
15th edition
Authors: Jane Mallor, James Barnes, Thomas Bowers, Arlen Langvardt
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