TUNKU ABDUL RAHMAN UNIVERSITY COLLEGE

FACULTY OF ACCOUNTANCY, FINANCE AND BUSINESS

DIPLOMA IN ACCOUNTING
ABMD2043 COMPUTERISED ACCOUNTING SYSTEMS
SEMESTER 2, 2020/2021
Coursework 3: Using Spreadsheet in Budget Preparation
Weighting: 30%

Individual Assignment (100 marks)

Due date: 26 November 2020

Objectives:

1. To test the students understanding and knowledge in the topic of Spreadsheet functions,
symbols, table and charts.

2. To train students to prepare financial statements by using linked data in Spreadsheet.

3. To test the students understanding and knowledge in budgets and the calculation of
monthly installment payment for loan repayment.

4. To train and prepare students to adhere to strict deadline and guidelines set for preparing
assignment given.

Guidelines on submission:

1. The assignment is an individual assignment. Each student should complete the

assignment and submit it before/on the due date given above. Any LATE SUBMISSION
WOULD BE PENALISED.

2. The assignment should be completed satisfactorily and presented in a NEAT AND TIDY
manner. Students can be penalised if works submitted are untidy.

3. Marks would also be awarded based on accuracy of the answer given.

4. Plagiarism is definitely unacceptable. If your answers were copied from another student,
the marks of BOTH students would be penalised!

5. Students are required to hand in soft copies in Google Classroom.

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The Case:

Uni – T has been in the business for 2 years, the CEO would like to further expand the
garment business in South East Asia and China, for the next 12 months. The CFO of the
company has approached you to prepare the budgeted financial statement for the next
accounting period, ended 31 December 2021. You are given the following information to
prepare the budget:

1. Opening Balances as at 1 January 2021:

Dr (RM'000) Cr (RM'000)
Land and building 70,000
Delivery Vans (at cost) 15,000
Accumulated depreciation - Delivery Vans 1,500
Office equipment (at cost) 10,000
Accumulated depreciation - Office equipment 2,000
Furniture and fittings (at cost) 4,000
Accumulated depreciation - Furniture & fittings 760
Trade receivables
- Sales in Nov 2020 to be collected in Jan 2021 RM3,500,000 13,500
- Sales in Dec 2020 RM10,000,000
Inventories:
Uni-T Crew Neck (17,000 shirts @ RM25 each) 425
Uni-T Round Neck (20,000 shirts @ RM 35 each) 700
Uni-T V-Neck (21,000 shirts @ RM 40 each) 840
Uni-T Polo (18,000 shirts @ RM 45 each) 810
Allowance for doubtful debts 4,500
Bank 1,300
Trade payables
- Nov 2020 RM6,500,000 14,500
- Dec 2020 RM8,000,000
Term loan 12,000
Ordinary share capital 55,000
Preference share capital 20,000
Retained earnings 2,896
General reserves 819
115,275 115,275

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2. Forecasted sales
The sales manager has provided the following forecasted sales volume for the year ended
2021.

Product / Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
shirts sold ('000)
Uni-T Crew Neck 80 77 76 66 81 82 80 86 88 84 81 83
Uni-T Round Neck 90 89 78 80 76 71 73 68 66 68 81 84
Uni-T V-Neck 85 94 89 80 85 83 87 89 83 84 83 79
Uni-T Polo 100 99 88 95 94 94 85 90 94 95 85 88

3. The company has practiced the following policies in operating the business:

(a) Minimum inventory level

Closing inventories levels is to be maintained at 25% of the following month sales.
Sales volume in January 2022 is estimated at 90% of the sales volume in December
2021.

(b) Depreciation policies

Both delivery vans and office equipment are using straight line method at 10% and
20% respectively. Furniture and fittings need to be depreciated at 10% using reducing
balance method.

(c) Sales collection

20% of the total sales is cash sales and the remaining 80% of the total sales are on
credit term. Three quarter of the credit sales are expected to be collected within 30
days and the remaining will be settled within 60 days after the invoices were issued.

(d) Purchases payment

60% of the total purchases will be on credit term and the remaining is on cash term.
The credit period given by suppliers on average is 60 days after the invoice date.

(e) Doubtful debts

Allowance for doubtful debts is 4% on outstanding trade receivables.

4. In order to cope with the surge in various costs, Uni-T revised the selling price of all the
shirts by adding 5% to the current selling price effective from 1 September 2021. The
selling price as at 1 January 2021 are RM45 (Uni-T Crew Neck), RM55 (Uni-T Round
Neck), RM60 (Uni-T V-Neck) and RM70 (Uni-T Polo).

5. Commission received from supplier

In order to boost purchase, the supplier has a sales incentive scheme of giving 5%
incentive on any purchases amount which is in excess of RM8 million. Incentives are
receivable in the following month.

6. Number of staff
The company has 175 staff during the early periods, and it is expected to increase to 195
staff from Oct 2021.

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7. Bonus
All staff are entitled to 20% bonus per annum from their total basic salary which will be
payable after year end.

8. During the year ended 2021, the expected expenses are as follows (paid in the current
month):
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Cost per Cost per Cost per Cost per
month month month month
Salaries RM 1,245,000 RM1,255,000 RM1,268,000 RM,1,296,000
EPF (employer) 12% of salaries 12% of salaries 12% of salaries 12% of salaries
SOCSO 1% of salaries 1% of salaries 1% of salaries 1% of salaries
Allowance RM80 per staff RM80 per staff RM95 per staff RM90 per staff
Utilities RM 135,000 RM 128,000 RM 168,000 RM 147,000
Leasing RM 500,000 RM 550,000 RM 550,000 RM 550,000
Operating exp. RM 168,000 RM 172,000 RM 163,000 RM 180,000
Distribution 2% on sales 2% on sales 2.5% on sales 3% on sales
Delivery Van 10% of motor 8% of motor 12% of motor 11% of motor
Maintenance vehicle cost vehicle cost vehicle cost vehicle cost
Advertisement 5% on sales 4% on sales 6% on sales 3% on sales

9. Overdraft
The company has a bank overdraft facility with interest rate of 6% per annum calculated
based on the previous month closing balance.

10. Term loan

The company plan to apply for a term loan of RM12,000,000 from OCBC Bank. The
bank offers the term loan at an interest rate of 8% per annum which is to be repayable on
a quarterly basis for 10 years. The company is still considering on the terms offered by
the bank.

Required:

(a) Prepare tables and graphs to illustrate sales, purchases, closing inventories, workings and
expenses. (Assume there is no interest charged and repayment made to the existing term
loan) (53 marks)

(b) Prepare forecasted monthly statement of cash flow, statement of profit or loss and
statement of financial position from 1 January 2021 to 31 December 2021 by linking the
data from the tables in part (a). Answers are to be presented to the NEAREST RINGGIT
(RM). (39 marks)

(c) Calculate the quarterly repayment amount for the new term loan that is offered by OCBC
Bank. Continuously prepare a term loan repayment schedule showing the amount of
interest charged, principal paid and principal balances throughout the term loan period.
Show your amount up to 2 DECIMAL POINTS ONLY. (8 marks)
[Total = 100 marks]