BBM205/05 Business Accounting 1 Assignment Answers

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BBM205/05 Business Accounting 1

Question 1

Lion Sdn Bhd is a manufacturer of garden furniture. The company has consistently used weightage average cost in valuing inventory, but it is interested to know the effect on   its inventory valuation of using First-In First-Out method (FIFO).

At 28 February 2019 the company had inventory of 4,000 standard p lastic tables, and has computed its value on each side of the two bases as:

BasisUnit Cost (RM)Total Value (RM)
Weighted average1352,000


During March 2019 the movements on the inventory of tables were as follows:

DateNumber of unitProduction Cost per unit
8 March3,80015
22 March6,00018
Revenue:Sellin price per


12 March5,00015.40
18 March2,00013.00
24 March3,00016.50
28 March2,00018.00



  • Using FIFO,  compute  cost   of   closing   inventory,   sales   and   gross profit/ loss as at 31 March 2019.
  • Using Weight age Average Cost method, compute cost of closing inventory, sales and gross profit/ loss as at 31 March 2019.

Show relevant workings. In arriving at the total inventory values you should make calculations to t wo decimal places (where necessary) and deal with each inventory movement in date order.

[20 marks]

Question 2

From the following particulars, you are required to find out the errors in cash book and bank statement by using missing method and prepare Bank Reconciliation Statement as on 31 December 2019, for Selena Enterprise:

No.TransactionsAmount (RM)
1.Bank Overdraft as per Bank Statement17,000
2.Cheque issued but not encashed during the December2,200
3.Dividends on shares collected by banker2,300
4.Interest charged by the bank recorded twice in the Cash Book500
5.Cheque deposited as per Bank Statement not entered in Cash Book3,400
6.Credit side of the Bank column in Cash Book cast short1,000
7.Interest dues paid by bank as per standing instruction not recorded in Cash Book1,200
8.Uncredited cheque due to outstation3,900


Question 3

Below is the information extracted from the book of ABC Sdn Bhd:

AccountsAmount (RM)
Motor vehicles120,000
Plant and machinery70,000
Retained profit as at 01.01.2019312,150
8% debenture150,000
Ordinary share200,000
Accumulated depreciation as at 31.12.2019: Building60,000
Motor vehicles69,250
Plant & machinery40,000
Sales returns3,600
Purchase returns4,100
Sales discounts5,000
Purchase discounts3,500
Opening inventory52,000
7% Preference shares50,000
Provision for bad debts2,000
Trade receivables26,700
Trade payable43,200
Administrative expenses18,000
Staff training cost4,000
Bad debts12,500
Motor expenses27,000
Bank overdraft15,400
Wages and salaries115,000
Debenture interest6,000
Suspense account200



Prepare the trial balance as at 31 December 2019.

[15 marks]

Question 4

After you have prepared the trial balance for Question 3, you notice the trial balance cannot be balance due to following errors:

  1. Cash payment of RM500 for stationery was completely omitted from the books.
  2. Discount received of RM2,000 was debited to discount allowed account.
  3. Sales of RM3,800 to Molly was not recorded in her account.
  4. RM1,000 for upkeep of motor vehicle was debited to motor vehicle account. No depreciation has yet to be provided.


  • Prepare the Suspense Account.                                    [5 marks]
  • Prepare the adjusted Trial Balance.                            [5 marks]

Question 5

Using the trial balance prepared in Question 4, prepare the Statement of Comprehensive Income as at 31 December 2019 for ABC Sdn Bhd.

The following information is relevant:

The closing inventory was RM47,000.                                                                            [20 marks]


Question 6

Using the trial balance prepared in Question 4 and Statement of Comprehensive Income prepared in Question 5, prepare the Statement of Financial Position as at 31 December 2019 for ABC Sdn Bhd.

[20 marks]



Reference ID: #getanswers2001176


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