QUESTION 1

Vu Minh operating a trading business, ONLY HEJDEE at District 1 of Ho Chi Minh city uses
a perpetual inventory system. Following is the unadjusted trial balance of the business:
ONLY HEJDEE
Unadjusted trial balance as at 31 December 2019
Debit (RM) Credit (RM)
Accumulated depreciation - building 35,000 B
Accumulated depreciation - office equipment 26,000 B
Advertising expense 14,000 P
Allowance for doubtful debts 12,000 B
Bad debts expense 3,500 P
Bad debts recovered 1,300 P
Bank 56,000 B
Building 300,000 B
Capital as at 1 January 2019 216,000 B
Purchases 235,000 P
Purchases return 5,000 P
Discount allowed 2,000 P
Discount received 1,000 P
Drawings 10,000 B
Supplies 3,000 B
Interest on mortgage loan expense 2,400 P
Inventory as at 1 Jan 2019 90,000 P
Investment - shares in Viet Limited 45,000 B
Miscellaneous expense 1,000 P
Mortgage loan (due on 31.10.2030) 160,500 B
Office equipment 81,500 B
Office supplies expense 900 P
Prepaid insurance 24,000 B
Rental received 9,000 P
Salaries expense 36,000 P
Sales 500,000 P
Sales returns and allowances 6,000 P
Salesmen commission expense 8,000 P
Trade payables 39,000 B
Trade receivable 68,000 B
Transport outwards expense 7,500 P
Utilities expense 11,000 P

Additional information as at 31 December 2019:

a. Inventory at the end of the year had a balance of $78,000 with net realizable value of
$80,000
b. Business increased its allowance for doubtful debts to $18,000.

c. The depreciation expenses for building of $5,000 and office equipment of $9,000, for the
financial year have not yet been recorded.

d. Prepaid insurance paid above is for six (6) months from 1 September 2019 till 29
February 2020.

e. Rental for the month of November and December 2019 amounting to $3,000 is yet to be
received. This adjustment has not been accounted for.

f. There was no repayment for mortgage loan made for the month of December 2019.
Hence, interest on mortgage loan for that month of $800 has not been paid and yet to be
recorded.

g. Office supplies had a balance of $2,200 at the end of December.

Required:

a. Prepare profit & loss statement for the year ended 31 December 2019

b. Prepare statement of equity for the year ended 31 December 2019

c. Prepare statement of financial position as at 31 December 2019

QUESTION 2
Nhung Ngoc Enterprise trades portable chairs in Ho Chi Minh city. The business have
provided the following financial statements to determine the cash movements:
Statement of financial position as at 31 December
2019 2018
Current assets
Bank ? 1,250
Trade receivables 75,000 62,500
Inventory 50,000 46,250

Current liabilities
Trade payables 55,000 50,000
Accrued salaries and wages 5,000 12,500

Non-current liabilities
Loan (due on 31.12.2023) 40,000 25,000
286,000 217,500
Owner's Equity
Beginning Capital 217,500 196,250
Additional capital - 2,500
Net profit 77,000 26,250
Drawings (8,500) (7,500)
286,000 217,500

Profit or loss statement for the year ended 31 December 2019

Sales 1,000,000
Cost of sales (600,000)
Gross profit 400,000
Other Income:
Interest revenue 750
400,750
Less: Operating expenses
Salaries and wages expense 300,000
Insurance expense 2,500
Interest expense 1,250
Depreciation expense - office equipment 12,500
Depreciation expense - fixtures and fittings 7,500 (323,750)
Net profit 77,000

Other information available are as follows:

 Nhung Ngoc Enterprise have acquired a few motor vehicles amounting to $50,000 by
cash.
 Nhung Ngoc Enterprise have disposed its fixtures and fittings for $250 cash. There were
no gain or loss in disposing this asset.
 Nhung Ngoc Enterprise also has acquired a new fixtures and fittings amounting to
$12,500 by cash.
 There were no additional capital contributed by owner but there were cash drawings of
$8,500 made by owner.
 All other income and operating expense were received and paid in cash.

Required:

a. Prepare a Statement of cash flows for the year ended 31 December 2019 using the direct
method.
QUESTION 3

Pham Hiem Thi Enterprise trades unique foldable table for universities in Ho Chi Minh city.
The business uses perpetual inventory system. The business had inventory balance of 230
tables worth $20 each as at 1 December 2019. Following are the details of their purchases (on
credit) and sales for month of December 2019:

Purchases:
Date Details
Dec 4 PURCHASED 150 units worth $22 each
Dec 7 Sold 300 units
10 PURCHASED 100 units worth $25 each
14 Sold 150 units
19 PURCHASED 180 units worth $30 each
21 Sold 100 units

Foldable tables are sold at $45 each on credit.

Required:

a. Prepare an inventory record showing the movement of the inventory using the FIFO
Method.

b. Show the journal entry to record the transaction

i. on 10 December 2019
ii. on 21 December 2019

c. Prepare a profit & loss statement using the perpetual inventory system to show the
gross profit of the business for the month of December 2019.
QUESTION 4
 Poor & Poorer Inc’s financial year under consideration was from 1 May 2014 to 30 April
2015. The Allowance for Doubtful Debts of Poor & Poorer Inc’s on 1 May 2014 was
RM21,000 credit balance.
 A few of its customer were declared bankrupt on 31 March 2015:
- Few customers owing $50,000 (61-90days)
- One customer owing $20,00 (more than 90 days)
 The accounts executive of Poor & Poorer Inc’s aged the Accounts Receivables as at 30
April 2015 and analyzed that the following percentages of its Accounts Receivables were
not collectable, shown below:

Number of days overdue Amount (RM) Percentage (%)

1 – 30 400,000 2%
31 – 60 80,000 5%
61 – 90 230,000 10%
Over 90 220,000 15%

REQUIRED:

a. Write the journal entry for the 31 March 2015 transaction. Narration required.
b. Show the full ledger account (T-Account) of the Allowance for Doubtful Debts. (Show
your workings)
c. Show the extract of Statement of Comprehensive Income & Statement of financial
position as at 30 April 2015