QUESTION 1

Rajoo
Statement of Comprehensive Income for the year ended 31 December 2014
RM
RM
RM
Sales Revenue
11,590
- Return inward
160
- Discount allowed
150
Net Sales
11280
Purchases
8940
- Discount received
350
- Return outward
180
Net Purchases
8410
+ Carriage inwards
500
Kos barang untuk dijual
8910
-Inventory 31 March
2500
Cost of Sales
6410
Gross Profit
4870
Plus: Interest received
850
- Rent income
450
1300
6170
Minus Motor expenses
720
Carriage outward
200
920
Net Profit
5250
Rajoo
Statement of Financial Position as at 31 December 2014
RM
RM
Non Current Assets
-

Motor Vehicle

RM
8000

Current Assets
Cash

1510

Trade Receivables

3870

Bank

4980

Ending Inventory

2500
12860

Current Liabilities
Trade payables

2910
2910

Working capital

9950
17,950

Owners Equity
Capital

5500

Net profit

5250

-Drawings

800
9950

Non Current Liabilities

Loan

8000
17,950

QUESTION 2
There are five types of important characteristics of a company which is:
1. Separate legal existence
A company has a separate legal entity independent from the members. It can own
property, and also make agreements in its own name. Shareholders are not the joint owners of
the company's property. A shareholder cannot be thought liable for the actions of the company.
There also can be contracts between a company and its members. A creditor of the company is
not a creditor of its members.
2. Limited liability
As a company has a separate legal entity, the members also cannot be held liable for
the debts of a company. The liability of every company member has limited towards nominal
value of the stakes bought by him or to the amount of guarantee given by him. However, if a
member of the company has desire, they may form a company with unlimited liability.
3. Transferability of shares
The capital of a company is divided into parts. Each and every part is called a share.
These shares are usually exchangeable. A stakeholder is able to draw his membership from the
company by moving his shares. But, in real practice some restrictions are placed on the transfer
of shares.

4. Separation of ownership and control

Members have no right to contribute directly in the everyday supervision of a company.
They select their representatives which called directors, who manage the company's affairs on
behalf of the members. Therefore, the proprietorship of a company is distributed among the
stockholders while the organization is assigned in the board of directors. The management of a
company is consolidated delegated.
5. Corporate finance
The share of a capital to a company is normally divided into a huge number of shares to
small value. These shares are obtained by a great number of people from different walks of life.
6. Perpetual Existence
A company is a constant form of business association. Its life does not depend upon the
loss, bankruptcy or retirement of any or all shareholder. Law creates it and law alone can
dissolve it. Members may be changing every time but the company can be going on for
life long. Therefore, a company has perpetual existence, regardless of changes in its
membership.
QUESTION 3
In the accounting, variable costing and absorption costing are two different methods
which are apply on the production costs which are used for product or service. The difference
among the two approaches is in the treatment of fixed manufacturing overhead costs.
Meanwhile the direct costing method, which is fixed manufacturing overhead costs are
expensed in the period which they are incurred. Under the full costing method,
Variable costing(Direct costing)
Fixed manufacturing costs are capacity costs

Absorption cost(Full costing)

Fixed manufacturing costs must be assigned

and will be incurred even if nothing is

to products to properly match revenue and

produced.
Consistent with CVP analysis

costs.
This costing does not support CVP
analysis because it essentially treats fixed
manufacturing overhead as a variable cost by
assigning a per unit amount of the fixed

The full costing method applies all direct costs

overhead to each unit of production.

The manufacturing costs are absorbed by the

and both fixed and variable manufacturing

units produced. In other words, the cost of a

overhead costs to the end product. All of these

finished unit in inventory will include direct

costs move with the product through the

materials, direct labor, and both variable and

inventory accounts until the product is sold, at

fixed manufacturing overhead.

which point they are expensed on the income

statement as costs of goods sold.
The direct costing method applies all direct

Fixed manufacturing overhead costs are

costs as well as variable manufacturing

expensed when the product is sold.

overhead costs to the end product. These

costs move with the product through the
inventory accounts until the product is sold, at
which point they are expensed on the income
statement as costs of goods sold. Fixed
manufacturing overhead costs are expensed
during the period in which they are incurred.
Net Operating income is closer to net cash
flow.
Easier to estimate profitability of products and

Difficulty to estimate profitability of products

segments.
Profit is not affected by changes in inventories
Impact of fixed costs on profit emphasized

and segments.
Profit is affected by changes in inventories
Does not impact the fixed costs on profit
emphasized

Variable costing is often useful for

management's decision-making.
Absorption costing is required for external
financial reporting and for income tax
reporting.

QUESTION 4
The dissolution of a partnership is the procedure during which the activities of the
partnership are spiral up which the ongoing nature of the partnership relation terminates. There
are some causes to dissolution a partnership such as, the mutual agreement of partners, where
by the entire partner agree for dissolution. The second cause is specific power in the
partnership agreement seeks dissolution and the majority agree for it. The third cause exercise
of a power in the legislation for example death or bankruptcy of a partner. The fourth cause is

any case of fraud, misrepresentation any or illegal activity. The fifth cause is order from court for
mental incapacity or other ill-health.
If any partners wish to transfer the assets and liabilities to a new partnership, It is open to
the ex-partners of the dissolved partnership to continue the business of the partnership whereby
they can use the original name. Meanwhile for assets and liabilities transfer they have to
undrawn profits and valued by the continuing partners. Whereby the business is continued
without any financial settlement and the departing partner is entitled to such share of the profits
as the court may find attributable to his/her share of the partnership assets.

QUESTION 5
Angela, Brenda, Christine and Hannah Partnership
Statement of Partners Capital for the year ended 31 May 2013
Capital
Total
Angela
Brenda
Christine
Partner withdrawal as
1,090,000
500,000
260,000
330,000
at 1 June 2012
Share of the goodwill
Property

Hannah
-

700,000

400,000

200,000

100,000

350,000

(4/7)
200,000

(2/7)
100,000

(1/7)
50,000

(4/7)

(2/7)

(1/7)

2,140,000

1,1000,000

560,000

480,000

(480,000)

1,660,000

1,1000,000

560,000

480,000
-

(466, 667)

(233, 333)

(700,000)

(4/6)

(2/6)

960,000

633,33

326,667

Credit capital debit

goodwill
Christine capital
converted to loan
Debit capital credit
goodwill
Written off goodwill

Angela, Brenda, Christine and Hannah Partnership

Capital
Balance B/D
Share of Profit Before

Partners Current Account

Angela
Brenda
60,000
40,000
100,000
50,000

Christine
10,000
25,000

Hannah
-

Admission of Hannah
After Admission of

232,800

174,600

174,6000

Hannah
Drawings
Balance B/F

(60,000)
332,800

(50,000)
21,460

(35,000)
-

(30,000)
144,000

Angela, Brenda, Christine and Hannah Partnership

Capital
Agreed Goodwill

Admission of Partner
Total
Angela
Brenda
700,000
466,667
233,333

Christine
-

Old Profit sharing

1660,000

(4/6)
1,1000,000

(2/6)
560,000

among 2 partner
Hannah

460,000

460,000

(700,000)

(280,000)
(4/10)

(210,000)
(3/10)

(210,000)
(3/10)

1,420,000

820,000

350,000

250,000

Hannah
-

Capital 250,000
Goodwill 210,000
Written off goodwill
New profit sharing
ratio
Sharing ratio

Angela, Brenda, Christine and Hannah Partnership

Share of Profit

1 June 2012 till 31 August 2012

Unadjusted profit
Bad debt incurred in June 2012

200,000
(25,000)
175,000

Share of profit
Angela (4/7)
Brenda (2/7)
Christine (1/7)

100,000
50,000
25,000
175,000
Angela, Brenda, Christine and Hannah Partnership
Profit for Full Year
RM

Net Profit
Bad debts
Interest paid to Christine
Share of Profit
Angela
Brenda
Christine
Share of Profits aft 1/9/12
Angela (4/10)
Brenda (3/10)
Christine ( 3/10)

100,000
50,000
25,000

RM
800,000
(25,000)
(18,000)

(175,000)
582,000
232,800
174,600
174,600
582,000

QUESTION 6
Statement of Comprehensive Income for the year ended 31 March 2013
RM
RM
Sales Revenue
618, 950
- Return inward
1450
- Discount allowed
1200
Net Sales
616,300
Inventory
52400
Statement of Appropriation as at 31
March 2013
Purchases
496,
400
Net Profit
60,440
-- Discount
2040
Expensesreceived
reimburse to partners
Net Purchases
494,
360
Bary : 900
+ Carriage
on
purchases
2700
497, 060
Sean : 1300
Kos barang untuk dijual
(2,200) 549, 460
-Inventory 31 March
58,240 58,900
Cost
of
Sales
490, 560
Profit sharing
Gross
Profit
1st half of the financial year
Expenses
Bary- : 5/8
58,240 6/12 months
Bank interest
Sean : 3/8 58,240 6/12 months
Wages & Salaries
Profit sharing
Rent & Rates
2nd
half ofexpenses
the financial year
Delivery
Heat & Light
Bary : 1/2 58,240 6/12 months
Interest on bank Overdraft
Sean : 1/2for
58,240
6/12 months
Provision
bad debts
Write off debt
Depreciated on Furniture &
Fittings
Net Profit

RM

125, 740

(18,200)

290
40900
9400
12100
1900
(14,560)
110
(14,560) (500)
700
400
(10,920)

65, 300
60,440

Bary and Sean

Statement of Financial Position as at 31 March 2013
RM
RM

RM

Non Current Assets

Furniture and Fittings
-

8000

Depreciated of

(400)

Furniture

7600

Current Assets
Cash

300

Trade Receivables

36500

-Provision for bad

(2000)

34500

debts
Inventory

58,900
93,700

Current Liabilities
Interest Accrued

110

Overdraft bank

8,130

Trade payables

50,620
58860

Working capital

34840
42,440

Owners Equity
Capital :
Barry

25,000

Sean

15,000

Current account:
Barry

660

Sean

1780

42, 440