FHBM1214 Financial Accounting

Final Accounts of the Sole Trader (Week 8 & 9)

1. TH Woods Sdn Bhd’s trial balance at 31 December 20X9 shown as below :

Trial Balance as at 31 December 20X9
RM RM
Debit Credit
Capital, 1 Jan 20X9 2,500,000
Stock as at 1 Jan 20X9 1,200,000
Machinery 925,000
Motor vehicles 650,000
Freehold Land 4,500,000
Factory Building 2,455,000
Provision for depreciation:
Machinery 425,000
Motor Vehicles 320,000
Factory Building 325,000
Trade debtors and Trade Creditors 1,910,000 1,540,000
Other debtors 530,000
Other creditors 300,000
Prepaid Insurance 120,000
Return Outwards 2,000
Discounts 40,000 65,000
Motor expenses 52,000
Cash at bank 170,000
Interest expenses 30,000
Electricity and water 550,000
Purchases and sales 8,545,000 15,500,000
Bank overdraft 250,000
Bank Loan at 10% per annum 550,000 Additional
Interest revenue 20,000 information:
Salaries 120,000
21,797,000 21,797,000
(i) Electricity and water bills RM 48,000 still outstanding at the end of the year.

(ii) On 1 December 20X9, David’s Son Sdn Bhd has returned goods amount of RM1,500 due to
wrong specification. This transaction not yet recorded.

(iii) There are bad debts of RM1,000 on debtor balance have not been entered in the ledger.

(iv) The provision for doubtful debt is to be adjusted to 2% of trade debtors’ balance.

(v) The remainder of a full year’s interest on the bank loan is still outstanding.

(vi) A quarter of the prepaid insurance has expired.

UNIVERSITI TUNKU ABDUL RAHMAN 1

CENTRE FOR FOUNDATION STUDIES - ARTS
FHBM1214 Financial Accounting
Final Accounts of the Sole Trader (Week 8 & 9)

(vii) There is interest earned on December 20X9 amounting RM1,500 but have not been received
yet.

(viii) Stock costing RM2,500 was taken out from the business for family uses.

(ix) Depreciation for the year at ended 31 December 20X9 using reducing balance method has yet
to be provided as follows:
Machinery 10%
Motor Vehicles 20%
Factory Building 2%

(x) Stock as at 31 December 20X9 was valued at RM1,100,000.

Required:
(a) Prepare the Income Statement for TH Woods for the year ended 31st December 20X9.
(b) Prepare the Balance Sheet as at 31st December 20X9.

2. Bella Consultant Sdn. Bhd. is a management consultant company has prepared the following trial balance as at 31
December 20X9:
Trial Balance as at 31 December 20X9
RM RM
Debit Credit
Capital, 1 Jan 2009 78,500
Drawings 30,800
Consulting fees revenue 161,700
Land 55,000
Building 146,000
Office Equipment 13,500
Provision for depreciation:
Building 43,800
Office Equipment 6,420
Bank 100,000
Account receivable 9,300
Office supplies 1,980
Account payable 7,800
Unearned Consulting Fees 3,500
Long Term Bank Loan 88,150
Bank Loan (Current Liability) 850
Insurance expense 3,500
Telephone expense 1,200
Salaries 20,000
Electricity expense 860
Interest expense 2,080
Prepaid Salaries 6,500
390,720 390,720
Additional information:

UNIVERSITI TUNKU ABDUL RAHMAN 2

CENTRE FOR FOUNDATION STUDIES - ARTS
FHBM1214 Financial Accounting
Final Accounts of the Sole Trader (Week 8 & 9)

(i) Depreciation of building at 6% per annum on cost and office equipment at office equipment at
30% per annum on net book value.

(ii) Office supplies are on hand totaling RM550 at the end of the year.

(iii) Premium insurance for 12-month was purchased on July 1, 20X9 for RM1,200.

(iv) An ordinary salary paid to employees amount of RM5,000 but treated as advance and have
recorded in Prepaid Salaries.

(v) There are bad debts of RM500 on debtor balance have not been entered in the books.

(vi) Electricity and telephone accrued of RM250 and RM180 respectively.

(vii)There is RM250 from unearned consulting fees has already earned.

(viii) Received RM3,600 from customer on May 31, 20X9 for a year services and recorded full
amount in Consulting Fees Revenue.

(ix) Monthly bank loan payment is RM1,000 during year of 20X9. In each payment 15% is attributable
to interest. Monthly payment for December has not been settled yet.

Required:
(a) Prepare the Income Statement for the year ended 31st December 20X9
(b) Prepare the Balance Sheet as at 31st December 20X9.

UNIVERSITI TUNKU ABDUL RAHMAN 3

CENTRE FOR FOUNDATION STUDIES - ARTS