BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I (A201)

MINI CASE 7:
ACCOUNTS PAYABLE

DUE DATE: 21 December 2021 TUESDAY: BEFORE 12 MID-NIGHT

Guidelines for submission:

1) Please answer all questions.

2) Please write your name, matric number, lecture group on the header and page number
on the bottom of your answer document.

3) The mini case is an individual task, however discussion is allowed, but copying other
student’s answer is forbidden.

4) Your answer should be handwritten and subsequently scanned with a scanner or

mobile scanner apps in a combined PDF file. The scanned document must be clear,
easily readable and complete. Photo is not allowed.

5) Submit your scanned answer via Online Learning portal → within

the allotted time and period, before 21 December 2021 12.00 mid-night. Only one
submission will be accepted.

QUESTION 1
1
The transactions related to liabilities by SNM Bhd (SNM) for the year 2020 are as follows:

3 July SNM purchased machine for RM75,000 from Gagah Sdn Bhd and the term was
2/15, n/45. Net method was used to record the purchase.

17 July Made payment to Gagah Sdn Bhd for the purchase of 3 July.

1 Aug SNM borrowed RM170,000, by signing a one-year, 5% interest-bearing

RM170,000 note with Bank Muhibbah.

1 Sept SNM purchased safety equipment from Guardian Enterprise with the price of
RM25,000. As for the payment, RM5,000 was in cash at the date of acquisition
and the balance by signing a one-year, 10% note.

7 Sept A cash dividend of RM325,000 was declared and will be paid to the shareholders
on 5 November 2020.

9 Sept SNM announced to its employees, bonuses of two-month salary for the financial
year end 30 September 2020. The total amount of the bonuses is RM254,000 and
will be paid on 3 October 2020.

Additional information:
1. The financial year end for SNM Bhd is on 30 September.
2. The taxable income for the year ended 30 September 2020 is RM2,500,000 with an effective
tax rate of 24%. The tax is payable to the Inland Revenue Board.

REQUIRED:
(Round all figures to the nearest RM)

(a) Prepare the journal entries to record the transactions above.

(b) Prepare the necessary adjusting entries at 30 September 2020.

QUESTION 2

2
Total payroll of Future First Bhd was RM920,000. Income taxes (PCB) withheld were
RM225,000 and SOCSO contribution is 1% on an employee’s wages.

REQUIRED :

(a) Prepare the journal entry for the wages and salaries paid.

(b) Based on MFRS 101 Presentation of Financial Statements, state FOUR (4) criteria
where a liability should be classified as a current liability.

QUESTION 3

Keruing Sejahtera Bhd (KERUING) is a company dealing with health food products operating in
Bukit Kayu Hitam, Kedah. The partial statement of the financial position of KERUING as at 31
December 2020 is as follows:

Current Liability RM
12% Notes payable 220,000
Interest payable 26,400
Premium liability 11,000
Accounts payable 180,000
437,400
Equity
Share capital (1,500,000 ordinary shares) 3,300,000
Retained earnings 1,400,000
4,700,000

Following are transactions related to equity and current liabilities that took place during the first
quarter of 2021:

1 January Declared a dividend of RM0.20 for each share outstanding on 31 December 2020.

1 January KERUING settled 12% notes payable together with the total interest that have not
been paid in last year by signing a new RM400,000, 8%, 5-year long term loan.

31 January Purchased a machine for RM40,000, paying RM10,000 in cash and giving a one-
year, 8% note for the balance.

21 February Received RM20,000 in advance for RM40,000 health product ordered by Seraya
Beauty Enterprise which to be delivered in March and April.

5 March Delivered health product ordered on 21 February, worth RM15,000.

3
18 March Cash sales of RM55,000.

28 March Purchased goods from Syarikat Kempas Bhd for an invoice price of RM60,000,
terms 2/10, n/30, FOB shipping point. KERUING paid freight costs of RM800.
KERUING uses a periodic inventory system and the gross method of accounting
for purchase discounts.

31 March Paid gross salaries of RM180,000 to employees. Deductions from the salaries are
as follows:
1. Employees’ contribution to EPF of 11% of the gross salary.
2. Zakat amounting to RM4,600.
3. Health insurance premium of RM8,400.
4. All payments to the respective departments are made on 25 April 2021.

REQUIRED:
(a) Prepare the journal entries to record the above transactions.

(b) Prepare the necessary adjusting entry(ies) at 31 March 2021.

(c) Prepare the liability section of Statement of Financial Position for KERUING as at 31
March 2021.