Assignment ACC506 Mac-Jun 2017

1 | ACC506_A s s i g n m e n t M a r c h - J u l y 2 0 1 7
Set 1
ABC Bhd was incorporated 5 years ago with an authorized capital comprising of 5 million
ordinary shares of RM1.00 each and 500,000 8% preference shares of RM2.00 each.
The following list of balances was extracted on 31 Dec 2015:
RM RM
Turnover/Sales 1,966,500
Cost of sales 778,750
Salaries and wages 149,120
Advertising expenses 46,710
Interim preference dividend 9,000
Interim ordinary dividend 54,000
Interest on debenture 5,000
Interest on bank loan 9,600
Auditors fee 12,000
Bad debt 2,000
Directors remuneration 180,000
Other administrative expense 160,000
Income from investment 152,500
Bank 216,000
Accounts receivable 127,120
8% preference shares 225,000
Ordinary shares 1,380,000
Share premium 450,000
General reserve 281,250
Retained profit as at 1 Jan 2015 515,000
Tax paid 96,000
Accounts payable 67,430
5% debenture 125,000
6% Bank loan 160,000
Patent 235,000
Investment 489,880
Land 1,182,000
Building (cost) 975,000
Plant and machinery (cost) 450,000
Motor vehicles (cost) 225,000
Accumulated depreciation as at 1 Jan 2015:
Building 45,000
Plant and machinery 135,000
Motor vehicles 67,500
Inventory 31 Dec 2015 168,000
Additional information:
1. At the end of the year, a bonus issue was made on the basis of 2 for every 20 Ordinary
shares. The share premium was used for that purpose and this has not been recorded
in the books.
2. The board of directors have declared and obtained the necessary approval for final
dividend for the preference shareholder and final dividend of RM0.25 per share for the
ordinary shareholders. The new ordinary shares were not entitled to this dividend.
These have not been recorded yet. It is expected that all payments for the dividend will
be completed by 5 February 2016.
3. The taxation expense was assessed at RM106,000.
4. Depreciation for the non-current assets are to be provided as follows:

i. Building at 4% on cost per annum.
ii. Plant and machinery at 8% on cost per annum.
iii. Motor vehicles at 5% on reducing balance method per annum.
5. 30% of the motor vehicles were used for administration purposes.
6. Land was revalued to RM1,281,000. The company wishes to incorporate this fair value.
7. Included in the salaries and wages expenses was RM3,400 for advance salaries and
wages for January 2016.
8. Included in Cost of Sales was RM1,200 of advertising expenses.
9. Total accruals for auditors fees were RM3,900.
10. Part of the debenture interest was not yet paid at the end of the year.
11. It was decided that a customer owing RM1,200 was written off to be uncollectible and
this has not been recorded yet. The allowance for doubtful debts is to be created at 5%
on the net accounts receivable.
12. Due to its rapid expansion in production, the company is planning to build a new factory
costing RM3 million in Senawang; construction is expected to commence in Jun 2016.
13. A customer had filed a lawsuit against the company for the defective product liability with
estimated damages claim payable amounting to RM1,200,000. The court date was set
to be on 1 Mac 2016, with a 50% chance of winning.
14. Budi Bhd. registered office was at 123, Seremban 3 Commercial Centre, 70300
Seremban, Negeri Sembilan. It adopted the historical cost convention and has complied
with all the necessary Malaysian Financial Reporting Standards in the preparation of its
financial statements. All property, plant and equipment will adopt the yearly basis of
depreciation.
Set 2
RM RM
Interest on debenture 5,000
Auditors fee 12,000
Bad debt 2,000
Bank 216,000
Tax paid 96,000
6% debenture 125,000
Trademark 235,000
Investment 489,880
Land 1,182,000
Building 45,000
1. The debentures are expected to be redeemed in July 2016.
2. At the end of the year, a right issue was made on the basis of 1 for every 10 ordinary
shares the price of RM3.50 per share; the shares were fully subscribed. The records
have not been updated for this.
3. On 30 December 2015, the board of directors have obtained the approval for the
followings:
i. Transfer RM40,000 from share premium account to the general reserve.
ii. Final dividend for preference shareholders and RM60,000 dividends for ordinary
shareholders. All dividends are expected to be paid on 20 January 2016.
5. Depreciation for non-current assets were provided as follows:

i. Building at 15% on reducing balance method per annum.
ii. Plant and machinery at 15% on reducing balance method per annum.
iii. Motor vehicles at 20% on cost per annum.
6. 40% of the motor vehicles were used for administrative purposes, while plant and
machinery are fully charged as administrative expenses.
7. The land was revalued to its fair value of RM700,000. This is to be incorporated in the
books at 31 December 2015.
8. Included in the other administrative expenses was cost of sales valued at RM5,600.
Meanwhile, RM800 of other administrative expenses was mistakenly charged as
advertising expenses.
9. Total prepayments for salaries and wages and accruals for auditors fees were
RM12,100 and RM2,000 respectively.
10. Accrued interest on debenture should be provided for.
11. An allowance for doubtful debts is to be created at 12% on the net accounts receivable.
12. The company is planning to purchase a new office building costing RM1.5 million in
March 2016.
13. ABC Bhd registered office was at 123, Seremban 3 Commercial Centre, 70300
depreciation.
Set 3
RM RM
Utilities expenses 46,710
Auditors fee 12,000
Bad debt 2,000
Bank 216,000
Allowance for doubtful debt 5,000
Tax paid 96,200
Trademarks 235,000
Investment 489,880
Land 1,182,000
Building 45,000
1. Half of the loan will be fully repaid in 2016; the interest on loan outstanding has not been
accounted for.
2. At the end of the year, a bonus issue was made on the basis of 1 for every 3 ordinary
shares out of the revenue reserve. No entries have been made for this.
3. RM500,000 Debentures issued at 98 on 31 December 2015, has not been recorded.
4. On 30 December 2015, the board of directors have obtained the approval for the
followings:
i. Transfer RM84,000 from the share premium to the retained profits.
ii. Final dividends for preference shareholders and RM0.15 per share dividends for
ordinary shareholders are expected to be paid by 20 January 2016.

ii. Plant and machinery at 15% on carrying value.
iii. Motor vehicles at 10% on reducing balance method per annum. The motor
vehicles are solely used by the selling & distribution department.
7. 10% of the trademarks will be amortized yearly.
8. Due to recent development, the land was revalued to its fair value of RM1,880,000. This
is to be incorporated in the books at 31 December 2015.
9. A prepaid utility bill amounted to RM1,005 has not been adjusted in the accounts.
10. Total accruals for auditors fees and prepayment for salaries and wages were RM15,000
and RM2,460 respectively.
11. An allowance for doubtful debts is to be maintained at 5% on the net accounts

receivable.
12. The company has a pending legal case with damages cost estimated at RM2 million.
The lawyers gave a 50% chance of winning.
13. ABC Bhd registered office was at 123, Seremban 3 Commercial Centre, 70300
depreciation.
Set 4
ABC Berhad was incorporated 5 years ago with an authorized capital comprising of 5 million
The following list of balances was extracted on 30 June 2016:
RM RM
Auditors fees 14,900
Provision for doubtful debt 2,400
Other administrative expenses 192,000
Bank 254,950
Retained profit as at 1 July 2015 700,600
Tax paid 115,400
Patent 280,000
Investment 585,800
Land 1,500,000
Building (cost) 1,170,000
Accumulated depreciation as at 1 July 2015:
Building 54,000
Inventory 30 June 2016 200,600
6,758,100 6,758,100
1. Part of the interest on loan was not yet paid at the end of the year. Half of the loan will
be fully repaid in March 2017.
shares out of the capital reserve. No entries have been made for this.
3. RM500,000 10% debentures issued at 98 on 30 June 2016 , this transaction has not
been recorded.
4. On 30 June 2016, the board of directors have obtained the approval for the followings:
i. Transfer RM80,000 from the general reserve to the retained profits.
ii. Final dividends for preference shareholders and RM0.10 per share dividends for
ordinary shareholders are expected to be paid by 15 July 2016.

ii. Plant and machinery at 15% on reducing balance method per annum.
vehicles are solely used by the selling & distribution department.
7. 10% of the patent will be amortized yearly.
is to be incorporated in the books at 30 June 2016.
9. A prepaid administrative expense for utility bill amounted to RM300 has not been
adjusted in the accounts.
10. Total accruals for auditors fees and salaries and wages were RM4,000 and RM10,000
respectively.
11. An allowance for doubtful debts is to be maintained at 2% on the net accounts

receivable.
12. The company has a pending legal case with damages cost estimated at RM2 million.
The lawyers gave a 50% chance of winning.
13. ABC Berhad registered office was at 123, Seremban 3 Commercial Centre, 70300
depreciation.
Set 5
RM RM
Bank 254,950
Tax paid 115,400
Patent 280,000
Investment 585,800
Land 1,500,000
Building 54,000
6,758,100 6,758,100
1. Half of the loan will be fully repaid by June 2017.
shares utilizing the share premium. The bonus shares do not rank for final dividends. No
entries have been made for this.
3. On 30 June 2016, the board of directors have obtained the approval for the followings:
i. Transfer RM60,000 from the general reserve to the retained profits.
ii. Final dividends for preference shareholders and 5% per share dividends for
ordinary shareholders are expected to be paid by 15 July 2016.
5. A new plant acquired on 31 December 2015 has not yet been recorded. The total cost
of RM200,000 for the new plant was financed through a 5-year hire-purchase from
4UCredit & Loan.

ii. Plant and machinery at 15% on straight line method per annum.
vehicles are equally used by the selling & distribution department and
administrative department.
7. 10% of the development cost will be amortized yearly.
is to be incorporated in the books at 30 June 2016.
9. In the other administrative expense included prepaid expenses amounting to RM500.

This has not been adjusted in the accounts.
10. Total accruals for salaries and wages were RM2,000 has not been adjusted.
11. After writing off additional RM2,500 of account receivable as uncollectible, an allowance
for doubtful debts is to be created at 2% on the net accounts receivable.
12. The company is planning to purchase a new office building costing RM1.5 million in
December 2016.
13. ABC Berhad registered office was at 123, Seremban 3 Commercial Centre, 70300
depreciation.
Set 6
RM RM
Bank 254,950
Tax paid 115,400
5% Debentures 340,000
Patent 280,000
Investment 585,800
Land 1,500,000
Building 54,000
6,758,100 6,758,100
1. The debentures are expected to be redeemed in March 2017.
2. Tax expenses for the year is RM120,000.
3. Accrued auditors fees amounted to RM8,000.
4. Prepaid advertising expenses amounted to RM6,000.
5. Bad debt of RM2,500 have not been provided for and the provision for doubtful debts is
to be set to RM3,050.
6. Depreciation charges have not been provided for and the company depreciate it non-
current assets as the followings:
i. Building on straight-line basis based on estimated life of 50 years.
ii. Plant and machinery at 15% on carrying amount annually.
iii. Motor vehicle at 20% on carrying amount annually.
7. On 30 June 2016, the land was revalued to RM1,300,000. The directors want to
incorporate this value into the accounts.
8. On 20 June 2016, a machinery with a historical cost of RM50,000 and accumulated

depreciation as at 1 July 2015 of RM7,500 was sold for RM60,000. No records have
been made.
9. At the end of the year, the company made a right issue of five (5) shares for every fifty
(50) ordinary shares in issue. The new shares were issued at 80 sen each.
10. The directors proposed a final dividend of RM0.10 per share for ordinary shareholders
after the year end.
11. A customer has filed a legal suit against the company for injuries resulting from the use
of the companys product. The lawyers are of the opinion that the company will not be
held responsible and hence will incur no cost.
12. The company has enter into a contract to extend and renovate its building at an
estimated cost of RM200,000. No payment has been made to date.
Set 7
ABC Berhad has compiled the necessary data and information for the purpose of preparing the
financial statements for publication in compliance with the relevant regulations in Malaysia. The
authorized Capital are 100 million ordinary shares of RM2 each and 10 million 8% Preference
Shares of RM1 each. The following balances were as at 30 June 2015.
Ordinary Shares Capital of RM2 50,000,000

8% Preference Shares Capital of RM1 5,000,000
6% Debenture 30 June 2015 6,000,000
Share Premium 8,000,000
Retained Profits 30 June 2014 17,800,000
Development Costs 4,600,000
Freehold Land and Buildings 90,000,000
Machinery 3,097,000
Accumulated Depreciation (30 June 2014)
--Buildings 10,500,000
--Machinery 1,350,960
Account Receivable and Account Payable 1,070,000 1,553,000
Allowance for Doubtful Debt 85,000
Quoted Investment 2,640,000
Unquoted Investment 1,450,000
Sales 97,021,300
Purchases 38,200,500
Inventories 30 June 2014 12,000,000
Bank 32,500,120
Tax Paid 10,280,240
Interim Preference Dividend paid 200,000
Debenture Interest 180,000
Insurance 52,520
Advertising and Promotional Expenses 225,000
Salesmen's Commission 150,000
Directors' Remuneration 450,000
Auditors Fee 23,600
Income From Investment
--Quoted 280,000
--Unquoted 152,520
Office Salaries 560,000
Utilities Expenses 48,000
Stationery Expenses 15,800
197,742,780 197,742,780
Additional Information:
1. The Inventories as at 30th June 2015 amounted to RM15,000,000.
2. Development Costs, which qualified to be treated as intangible, will be amortized at the

rate of 10% p.a.
3. Of the RM90,000,000 Land and Building, the buildings costs were RM35,000,000.
Depreciation for the property, plants and equipment are as follows:
i. Building 10% p.a. using the straight line method
ii. Machinery and Motor Vehicle 10% using the reducing balance method. The
depreciation on motor vehicle is to be treated as selling activity.
4. Half of the debenture interest and RM15,000 Director remuneration have not been
accounted for. In addition, the insurance represented premium covering the period from
1 Jan 2015 to 31 Dec 2015.
5. 4% was given as interim dividend for the preference shares. The directors proposed
final dividend for the preference shares; and proposed RM0.10 per share for the
dividend of ordinary shares on 15 June 2015.
6. In May 2016, 1 to 5 right issues were made at the right issue price of RM3.50 per
shares. All the shares were fully subscribed and paid for. This has not been recorded in
the books.
7. The market value for the quoted investment was RM4,700,000 and the directors valued
the unquoted investment at RM1,660,000
8. The prepaid insurance expense is RM2,500. This has not been adjusted for.
9. The allowance for doubtful debt is to be increased to RM9,000
10. The current year tax assessed was at RM39,578,000.
11. ABC Berhad is facing a lawsuit by one of its suppliers. If ABC Berhad lost the case,
estimated losses may amount to RM2,500,000.
12. The current effective rate is 6% p.a. The debentures matured on 31 Dec 2015 and
expected to be redeemed in Mac 2016.
Set 8
Given below are the lists of balances of ABC Bhd as at 31 March 2016
Debit (RM000) Credit (RM000)

Turnover 881,000
Inventory at 1 April 2015 15,000
Purchases 323,000
Administrative expenses 82,000
Selling and Distribution expenses 102,000
Accrued Distribution expenses at 31 Mac 2016 55
Other expenses 8,000
Auditors fees 2,000
Debentures Interest paid 6,750
Dividend paid (interim) 20,000
Freehold Land (at cost) 108,000
Plant and machinery (at cost) 220,000
Building (at cost) 600,000
Accumulated depreciation at 1 April 2015
Building 240,000
Trade receivables and payables 82,000 61,500
Balance at bank 163,750
Investment in equity shares 25,000
300 million Ordinary shares at 1 April 2015 300,000
6% Debentures 150,000
Retained profit at 1 April 2015 48,945
Tax paid for the current year 27,000
Additional Information:
1. The physical inventory count valued the inventory as at 31 Mac 2016 for RM47,000,000.
2. Depreciation should be charged at 10% per annum on cost of the plant and machinery
and 4% on cost for building. Depreciation of plant and machinery are allocated 70% to
distribution and 30% to administration while all depreciation of building is allocated to
administration.
3. Accruals for general administrative expenses is RM70,000 and prepaid general

distribution expenses is RM40,000.
4. The tax expense for the year is RM29,000,000.

5. The land was revalued to RM120,000,000 but no adjustment was made for this.
6. The fair value of the equity investment on 31 March 2016 was RM27,500,000.
7. There is still outstanding interest on debenture not yet accounted for.
8. On October 2015, plant and machinery including a machines with historical cost of
RM20,000,000 and accumulated depreciation as at 1 April 2015 of RM12,000,000 was
sold for RM5,000,000. This transaction has not been recorded.
9. At the end of the year, the company issued RM10,000,000 ordinary shares at a premium
of RM0.50. This has not been recorded.
10. The company is facing a RM50 million lawsuit from one of its supplier due to early
termination of contract. The companys lawyer is of the opinion that the company will win
the lawsuit.
11. The directors proposed a final dividend of RM30,000,000 on 16 April 2016. The new
issue is not entitled for the final dividend.

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1 | ACC506_A s s i g n m e n t M a r c h - J u l y 2 0 1 7

The following list of balances was extracted on 31 Dec 2015:

3. The taxation expense was assessed at RM106,000.

4. Depreciation for the non-current assets are to be provided as follows:

5. 30% of the motor vehicles were used for administration purposes.

8. Included in Cost of Sales was RM1,200 of advertising expenses.

9. Total accruals for auditors fees were RM3,900.

The following list of balances was extracted on 31 Dec 2015:

4. The taxation expense was assessed at RM70,600.

5. Depreciation for non-current assets were provided as follows:

10. Accrued interest on debenture should be provided for.

The following list of balances was extracted on 31 Dec 2015:

3. RM500,000 Debentures issued at 98 on 31 December 2015, has not been recorded.

5. The taxation expense was assessed at RM977,000.

6. Depreciation for non-current assets were provided as follows:

7. 10% of the trademarks will be amortized yearly.

11. An allowance for doubtful debts is to be maintained at 5% on the net accounts

The following list of balances was extracted on 30 June 2016:

5. The taxation expense was assessed at RM130,000.

6. Depreciation for non-current assets were provided as follows:

7. 10% of the patent will be amortized yearly.

11. An allowance for doubtful debts is to be maintained at 2% on the net accounts

The following list of balances was extracted on 30 June 2016:

4. The taxation expense was assessed at RM100,000.

6. Depreciation for non-current assets were provided as follows:

7. 10% of the development cost will be amortized yearly.

9. In the other administrative expense included prepaid expenses amounting to RM500.

The following list of balances was extracted on 30 June 2016:

2. Tax expenses for the year is RM120,000.

3. Accrued auditors fees amounted to RM8,000.

4. Prepaid advertising expenses amounted to RM6,000.

8. On 20 June 2016, a machinery with a historical cost of RM50,000 and accumulated

Ordinary Shares Capital of RM2 50,000,000

2. Development Costs, which qualified to be treated as intangible, will be amortized at the

i. Building 10% p.a. using the straight line method

9. The allowance for doubtful debt is to be increased to RM9,000

10. The current year tax assessed was at RM39,578,000.

Debit (RM000) Credit (RM000)

3. Accruals for general administrative expenses is RM70,000 and prepaid general

4. The tax expense for the year is RM29,000,000.

7. There is still outstanding interest on debenture not yet accounted for.

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