Revision Q&A

Revision Q&A
Question 1
The following shows the unadjusted Trial Balance of Shahanom Logistics Sdn Bhd during May
2018:
Shahanom Logistics Sdn Bhd
Unadjusted Trial Balance for month ended May 31, 2018
Account Title Balance
Debit (RM) Credit (RM)
Service Revenue 69,000
Salaries Expenses 30,000
Petrol Expenses 5,000
Rent Expenses 32,000
Cash in bank 451,000
Accounts Receivable 26,000
Office Supplies 14,000
Prepaid Electricity 15,000
Motor van 400,000
Accumulated Depreciation—Motor van 5,000
Accounts Payable 8,000
Unearned Revenue 64,000
Shahanom, Capital 867,000
Shahanom, Withdrawals 40,000
Total 1,013,000 1,013,000
Additional information:
1. Depreciation was recorded on the motor van using the straight-line method.
Assume a useful life of five years and a salvage value of RM100,000.
2. Prepaid Electricity for the month has expired. Electricity was prepaid at
RM20,000 cash for a four months period starting April 1.
3. Accrued Salaries Expenses, RM20,000.
4. Accrued Service Revenue, RM24,000.
5. Office Supplies on hand, RM2,400.
Required:
(a) Prepare an Adjusted Trial Balance as of May 31, 2018
(b) Prepare Shahanom Logistics Sdn Bhd’s Statement of Comprehensive Income

(Income Statement) and Statement of Owner’s Equity for the month ended May 31,
2018
(c) Prepare Shahanom Logistics Sdn Bhd’s Statement of Financial Position (Balance
Sheet) on May 31, 2018.
(a)

Adjusted Trial Balance for month ended May 31, 2018 ^
Account Title Balance
Debit (RM) Credit(RM)
Service Revenue (69k + 24k) 93,000^
Salaries Expenses (30k + 20k) 50,000^
Depreciation Expenses—Motor van(400k-100k/5*1/12) 5,000^
Electricity Expenses 5,000^
Petrol Expenses 5,000
Rent Expenses 32,000
Supplies Expenses 11,600^
Cash in bank 451,000
Accounts Receivable (26k + 24k) 50,000^
Office Supplies (14,000 – 11,600) 2,400^
Prepaid Electricity (15k – 5k) 10,000^
Motor van 400,000
Accumulated Depreciation—Motor van (5k + 5k) 10,000^
Accounts Payable 8,000
Salaries Payable 20,000^
Unearned Revenue 64,000
Shahanom, Capital 867,000
Shahanom, Withdrawals 40,000
Total 1,062,000 1,062,000
(b)

Income Statement for Month Ended May 31, 2018 ^
(RM) (RM)
Revenues:
Service Revenue 93,000 ^^
Expenses:
Salaries Expenses 50,000 ^^
Rent Expenses 32,000 ^
Supplies Expenses 11,600 ^^
Depreciation Expenses—Motor van 5,000 ^^
Petrol Expenses 5,000 ^
Electricity Expenses 5,000 ^^
Total Expenses 108,600 ^
Net Loss (15,600) ^

Statement of Owner’s Equity for Month Ended May 31, 2018^
Shahanom, Capital, May 1, 2018 867,000 ^
Net loss for the month (15,600) ^
851,400
Owner withdrawal (40,000) ^
Shahanom, Capital, May 31, 2018 811,400 ^

(c)

SOFP as at May 31, 2018 ^
(RM) (RM)
Assets
Current Assets:
Cash in bank 451,000^
Accounts Receivable 50,000^^
Office Supplies 2,400^^
Prepaid Electricity 10,000^^
Total Current Assets 513,400
Non Current Assets:
Motor van 400,000 ^
Less: Accumulated Depreciation—Motor van (10,000)^^
Total Plant Assets 390,000
Total Assets 903,400
Liabilities
Current Liabilities:
Accounts Payable 8,000^
Salaries Payable 20,000^^
Unearned Revenue 64,000^^
Total Current Liabilities 92,000
Total Liabilities 92,000
Owner’s Equity
Shahanom, Capital 811,400^
Total Liabilities and Owner’s Equity 903,400
Question 2
On 1 January, 2015, JT Corporation paid RM230,000 for a computer system. In addition to the
basic purchase price, the company paid a set-up fee of RM1,000, GST of RM6,000 and
installation costs of RM28,000.
The management estimates that the computer will remain in service for five years, and have a
residual value of RM15,000. The computer will process 30,000 documents in the first year, with
an annual processing decreasing by 2,500 documents during each of the next four years (that is
27,500 documents in Year 2016; 25,000 documents in Year 2017; 22,500 documents in Year
2018; 20,000 in Year 2019).
Required:
(a) Determine the cost of the asset that should be recorded in the accounts for the
purchase of the computer system.
(b) Prepare the machine’s depreciation schedule for 5 years (from Year 2015 to 2019)
based on each of the following depreciation methods:
(i) Straight-line
(ii) Double-declining
(iii) Units-of-production
Solution
Determine the cost of the asset that should be recorded in the accounts for the purchase of the
computer system.
RM
Purchase price 230,000^
Set-up fee 1,000^
GST 6,000^
Installation 28,000^
Total asset cost 265,000^
(b)(i)
Straight-line Depreciation Schedule
Depreciation for the year
Depreciation Accum.
Date Depreciation cost Book value
expense Depn.
265,000−15,000
31.12 2015 250,000/5=50,000^ 50,000 215,000^
= 250,000^^
31.12.2016 250,000/5=50,000 100,000^ 165,000^
31.12.2017 250,000/5=50,000 150,000^ 115,000^
31.12.2018 250,000/5=50,000 200,000 65,000
31.12.2019 250,000/5=50,000 250,000^ RV=15,000^
(b)(ii)
Reducing-balance Depreciation Schedule
Depreciation Accum.
Date Depreciation expense Book value
cost Depn.
31.12 2015 265,000^ 265,000x2/5x12/12=106,000^ 106,000 159,000^
31.12.2016 159,000x2/5x12/12=63,600^ 169,600^ 95,400^
31.12.2017 95,400x2/5x12/12=38,160^ 207,760^ 57,240^
31.12.2018 57,240 x2/5x12/12=34,344^ 230,656^ 34,344^
31.12.2019 34,344-15,000=19,344^ 250,000^ RV=15,000^
(b)(iii)
Units-of-Production Depreciation Schedule
Number of Depreciation Accum.
Date documents/Year expense Depn. Book value
31.12 2015 30,000 30,000 x RM2 =60,000^ 60,000 205,000^
31.12.2016 27,500 27,500 x RM2 = 55,000^ 115,000^ 150,000^
31.12.2017 25,000 25,000 x RM2 = 50,000 165,000 100,000
31.12.2018 22,500 22,500 x RM2 = 45,000 210,000 55,000
31.12.2019 20,000 20,000 x RM2 = 40,000^ 250,000^ RV=15,000^
Total
documents 125,000^
Depreciation per Unit = (RM265,000 – RM15,000)/125,000 = RM2 per document^

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Revision Q&A

(b) Prepare Shahanom Logistics Sdn Bhd’s Statement of Comprehensive Income

Shahanom Logistics Sdn Bhd

Shahanom Logistics Sdn Bhd

Shahanom Logistics Sdn Bhd

Depreciation per Unit = (RM265,000 – RM15,000)/125,000 = RM2 per document^

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