ACC 406 - INTERMEDIATE FINANCIAL

ACCOUNTING & REPORTING

GROUP PROJECT 20%

Lecturer Name: Puan Siti Maznah Binti Mohd Arif

Name Matrix Number

Harris bin Sulaini 2021312213
Mohd Fakhruddin bin Kamazan 2021155491
Sharifah Norsakinah bt Tuan Mohd Yasin 2016898408
Table of Content
Acknowledgement
In the accomplishment of this project successfully, many people have best owned upon us their
blessings and the heart pledged support, this time we are utilizing to thank all the people who
have been cornered with this assignment.

Primarily, Alhamdullilah we are able to complete this project with success. Then we would like
to thank our account lecturer, Madam Siti Maznah binti Mohd Arif, whose give us guidance and
has been the ones that helped us to complete this project and make it success. Then we would
like to thank our parents and friends who have helped a lot and involved actively and helped
each other toward finishing the assignment based on the requirement. Their anticipation and
valuable ideas have been very helpful in various process of the assignment making. Last but not
least, we would like to thank our classmates who have helped a lot in understanding, sharing and
guidance of our assignment.
1.0 Introduction

The project assigned for us to identify how business use the accounting principles and
how it applies on the business in order to prepare a business plan and also financial position
statement. There are many types of business organizations such as sole proprietorship,
partnership and limited company. A sole proprietorship is a business owned and run by one
individual with no legal distinction between the owner and the business, whereas partnership is a
business owned by more that one person.

Therefore, we decided to choose Alat Tulis Enterprise as our business trading. This
business is a partnership business managed by Encik Harris, Encik Fakhruddin dan Puan Sakinah.
This business provides stationery supplies to the Universiti Teknologi Mara (UiTM) Shah Alam
students and it also located at UiTM Shah Alam campus. The aim of this research is to find out
how the business is formed and how it is managed as well as the business flow including the
company ledger, financial statement and also the profit sharing. Other than that, this project also
to find out the background of the company such as organization details, owner’s capital, location,
type of business and business activity.

Alat Tulis Enterprise is partnership company that was registered on the year 2017. This
company is located at UiTM Shah Alam Campus and established on 20th July 2017 until present.
Alat Tulis Enterprise provide stationery to the UiTM students and also to the UiTM itself. This is
including stationery such as marker pen, drawing equipment for students and lecturers, rubber
stamps and also other stationeries.
2.0 Content
2.1 Background of the Business

Alat Tulis Enterprise has three owners, which is Encik Harris as Managing Director, Encik
Fakhruddin as Accounting Director and Puan Sakinah General Director. Encik Harris has
contributed largest capital among three of them amounting RM40, 000 while Puan Sakinah and
Encik Fakhruddin has contributed RM30, 000 each, making total capital of the business is
RM100,000. The business activities are providing and supplying stationeries to UiTM Shah
Alam students and lecturers. The business operation time is Monday to Saturday from 8.00 am
until 7.00 pm. The business is located in 1-2 Jalan Ilmu 1/1, Uitm Shah Alam Campus. The
company focusses on students and also lecturers as main customers to buy the supplies.

2.2 Characteristics of Business

The main business activity of Alat Tulis Enterprise is a stationery shop that provides stationeries
to the students and lecturers of UiTM. It also provides services such as printing, photostat,
binding and also provides printing equipment such as printer ink and toner. In addition, it also
supplying the stationeries to the UiTM itself for use during the learning and teaching in
classroom.

a. Business Establishment

This company has started the business on 20th July 2017. It has three owners and also three
employees as cashier, general worker and store keeper. The employees have been assigned to
their specific job in order to make the business run smoothly. Cashier is responsible to assist
customers during the in-store checkout process such as collecting payment and giving
appropriate changes to the customer during the customers purchase. General worker’s
responsibility is to arrange stocks in shelf, cooperate with store keeper in order to ensure all
stationeries are available and maintain the shop maintenance. Store keeper is responsible to
ensure all stocks are available and make order to supplier when the stocks of stationeries are
running out.

b. Liabilities
The liabilities are shop building and lorry. The shop building is located in 1-2 Jalan Ilmu 1/1,
Uitm Shah Alam Campus. The building is a non-current asset due to long-term loan from Public
Bank amount RM350,000. The lorry is also non-current asset and the company has bought it
second hand on 2018 for RM33,800. The vehicle is still under bank loan for 7 years since 2018.

c. Number of Owner

Alat Tulis Enterprise has three owners. First owner and also the largest capital contributor is
Encik Harris as Managing Director. His responsibilities are to direct and supervise the activities
of the employees and also provide guidance for employees as needed. He also responsible in
training the staff and employees. Other than that, Encik Harris also responsible in implement the
company policies and also improvise the policies based on current situation.

Second owner is Puan Sakinah as General Director, who is responsible in overseeing daily
business operations, developing and also implementing growth strategies for company. She also
responsible in hiring employees, evaluating performance and productivity of the company. Other
than that, she also responsible in generate the reports of the company and to ensure the
employees work productively especially during the pandemic such as Covid-19.

Third owner is Encik Fakhruddin as Account Director, who is responsible in managing

company’s account and financial statement. He is responsible in arranging payment transactions
for supplies, planning budget for company expenses and operation cost, managing company’s
loan and also salary for each profits sharing and employees.

d. Profit Sharing

Profit sharing of the company is 30% from profit. Each of owner will get 10% of the profit and
the balance 70% will be keep as company revenue.

3.0 Classification of Business Items

3.1 Asset

Asset is a resource controlled by the enterprise as a result of past events and from which
future economic benefits are expected to flow to the enterprise. Used to assist in the production
goods and services to generate income and revenue to the business. There are 2 types of assets
which is current assets and non-current assets.
Asset that belonging to our company as below is RM350,00 for building. RM10,365 for the
machinery such as photostat machine, laminating machine, and computer. For furniture we used
RM4,500. Next, the lorry was bought by the company, second hand in 2018 at a price of
RM33,800. RM3,500 for office equipment.

3.2 Liabilities

A liability is the present obligation of an entity arising from past events, the settlement of
which expected to result in an outflow of resources embodying economic benefits. It represents
what the business owns to outsider, financial obligation of the business to outsider and liabilities
represents outsiders supplied funds which are used by the business to acquire assets.

There are also two types of liability which is current liabilities such as creditor, payables,
bank overdraft or short-term loan and non-current liabilities such as terms loan, mortgages,
bonds or debentures.

Below are the liabilities for our company:

 Bank debt
 Mortgage debt
 Money owed to suppliers (accounts payable)
 Taxes owed

3.3 Drawing

A drawing account in itself is not actually a bank account. The meaning of drawing
accounts is the record maintained by a business owner or accountant that shows how much
money business owners have withdrawn. These are withdrawals made for personal use rather
than business use, although employee wages are treated slightly differently.

For our business, there is no drawing for personal use.

3.4 Capital

Capital is a term used to refer to financial assets, such as funds held in deposit accounts
and funds received from special sources of financing. Capital can also be linked to a company’s
capital assets that require large amounts of capital to finance or expand. Capital for our company
is RM100,000. Encik Harris has contributed largest capital among three of them amounting
RM40,000 while Puan Sakinah and Encik Fakhruddin has contributed RM30,000 each.

3.5 Revenue

Revenue is a flow in economic benefits during the accounting period arising in firm’s
ordinary activities, in the form of inflow or enhancement of assets or decrease in liabilities. It is
earned or recognized when goods are produced and delivered, or services are rendered.

From the start date until today, our company earns income in terms of providing services and
management up to RM100,000. Our income is from the daily servicing and purchase of
stationery paid by customers to us. We managed to earn a profit of 65% per day minus the cost
of goods from daily income.
This is the price list of our services. For photocopying, A4 70gsm paper, is calculated at RM0.10
each, for printing services, A4 paper, if black and white only costs RM0.30 each. While for
colored, RM2.00 per each for high quality. Laminating A4 size paper costs RM2.00 per each and
if IC size, RM1.00 per each.

3.6 Expenses

Expenses is decrease in economic benefits during the accounting period in the form of
outflows or depletion of assets or incurrence of liabilities. Outflows of assets occur when cash is
paid for wages, rent or interest. Expenses classified into cost of sales, for example cost of goods
sold. Selling and distribution which carriage outwards, advertising. Administration, such as rent,
insurance and salaries and finance such as loan.
Expenses for Alat Tulis Enterprise as per below:
 Electricity bill
 Water bill
 Cell phone
 WiFi charges
 Consultation and professional fee
 Salaries
 Transportation
6.0 Conclusion
Partnership is an association of two or more persons operating a business in common
with a view of the profit. Partnership are a good form to business to start up for entrepreneurs,
and also not so great for others. If an entrepreneur wants more control and wants to seek out of
higher profit, than partnership may be a great way to go. The most important of the starting the
partnership business is making an agreement that's can cover many potential together and create
partnership agreement without a partnership agreement, the partnership may go down the line
when problem small or large. “Each person contributes money, property, labor or skill and
expects to share in the profits and loss business”. Besides, accounting plays important roles in
various scopes of the businesses. It helps the owner to track every transaction that has been made
inward or outwards of the businesses. Not only that, every statement that has been produced can
be used in future by the owners, shareholders, for the taxing use and other internal and external
users. Lastly,we can arrange the capital wisely with a good financial statement in the future.