ACC1014 – Principles of Financial Accounting

Tutorial 7
Exercise Question 2
Perlis Footwear sells a popular brand of sports shoes from Japan. On September 1, it
ordered a shipment of 1,000 pairs of the latest range of sports shoes at a total
purchase cost of RM125,000 including delivery. Due to its long relationship with the
seller, Perlis Footwear managed to obtain credit terms of 2/10 net 45. Upon arrival on
6 September, it was found that 50 pairs of shoes costing RM6,250 had been damaged
during shipment and were returned immediately. Perlis Footwear paid the balance
due to the seller on September 9, 2019. At the launch of the latest range of sport
shoes on September 28, Perlis Footwear managed to sell 900 pairs all on cash terms
at a retail price of RM450 each. The sale included a bulk order of 100 pairs from an
outstation buyer where a sale discount of RM50 per pair were given. Delivery
charges to be borne by Perlis Footwear for the bulk order amounted to RM90.

Required
Journalise Perlis Footwear’s September 2019 transactions assuming that it adopted
the perpetual inventory system.

Exercise Question 3
Kedah Cosmetics is an importer and retailer of a popular brand of cosmetics from
South Korea .On September 1, it ordered a shipment of 1,000 packs of the latest
range of cosmetics at a total purchase cost of RM125,000 including delivery. Due to
its long relationship with the seller, Kedah Cosmetics managed to obtain credit terms
of 2/10 net 45. Upon arrival on 6 September, it was found that 50 packs of cosmetics
costing RM6,250 had been damaged during shipment and were returned
immediately. Kedah Cosmetics paid the balance due to the seller on September 9,
2019. At the launch of the latest range of cosmetics on September 28, Kedah
Cosmetics managed to sell 900 packs all on cash terms at a retail price of RM450 per
pack. The sale included a bulk order of 100 packs from an outstation buyer where a
sale discount of RM50 per pack was given. Delivery charges for the bulk order
amounted to RM90, which was borne by Kedah Cosmetics.

Required
Journalise Kedah Cosmetics’ September 2019 transactions assuming that it adopts
the perpetual inventory system.
Problem Question 1
Below are the transactions made by Terengganu Grocer:
Nov 1 Purchased merchandise goods on credit from Melaka Wholesales for
RM100,000 on credit terms 2/10 net 45, FOB destination.
Nov 1 Cash sales for the day was RM7,000.
Nov 2 Returned RM5,000 worth of damaged goods to Melaka Wholesales.
Nov 2 Cash sales for the day was RM7,500.
Nov 3 Cash sales for the day was RM6,300.
Nov 4 Purchased merchandise goods for cash of RM20,000.
Nov 4 Cash sales for the day was RM5,000.
Nov 4 Cash sales for the day was RM5,000.
Nov 5 Sold merchandise goods to Selangor Restaurant for RM5,000 on credit
terms 2/15 net 30. Cost of goods sold was RM4,000.
Nov 5 Cash sales for the day was RM6,800.
Nov 6 Selangor Restaurant returned RM400 worth of merchandise goods. Cost
of goods was RM320
Nov 6 Cash sales for the day was RM5,000.
Nov 7 Purchased merchandise goods from Kedah Importers for RM120,000 on
credit terms 1/15 net 30, FOB destination.
Nov 7 Cash sales for the day was RM6,200.
Nov 8 Returned RM1,500 worth of wrongly labelled goods to Kedah
Importers.
Nov 8 Cash sales for the day was RM7,000.
Nov 9 Sold merchandise goods to Perak Mini Store for RM6,000 on credit
terms 2/15 net 30. Cost of goods was RM4,800.
Nov 9 Cash sales for the day was RM6,700.
Nov 10 Cash sales for the day was RM6,600.
Nov 11 Made Payment to Melaka Wholesales, less discount and returns.
Nov 11 Cash sales for the day was RM7,800.

Journalise the above transactions assuming Terengganu Grocer adopted the perpetual
inventory system. Also assume that for cash sales, the COGS is 60%.

Problem Question 3
The unadjusted Trial Balance for Kelantan Sportswear as at 31 December 2019 is as
follows:
Kelantan Sportswear
Trial Balance as at 31 December 2019

Debit Credit
RM’000 RM’000
Cash 1.500
Accounts Receivable 5,100
Merchandise Inventory 7,900
Property and Equipment 12,000
Accumulated Depreciation 3,000
Accounts Payable 2,000
Accrued Liabilities 1,000
Capital 8,000
Owner’s Withdrawals 1,500
Medium-Term Notes Payable 5,000
Sales Revenue 38,000
Sales Return 1,000
Sales Discounts 2,000
Cost of Goods Sold 20,000
Selling Expense 2,000
Administrative Expense 4,000
57,000 57,000

(a) Journalize the adjusting entries for the following:

(1) Interest expense of RM900,000

(2) Depreciation charge of RM3,000,000
(3) Physical inventory count which showed that the correct inventory ending
balance is RM7,500,000

(b) Prepare the adjusted Trial Balance for Kelantan Sportswear.

(c) Prepare Kelantan Sportswear’s Income Statement, Statement of Owner’s
Equity and Statement of Financial Position.