ABFA1153 FINANCIAL ACCOUNTING I 5

Tutorial 11: Suggested solutions Accrued rental received Account

Year 1 Year 1
Section 1: Multiple choice questions Jul 1 Bal b/d 2,000 Jul 1 Rental received 2,000
Year 2 Year 2
1. B RM7,800 cover the period June until May Jun 30 Rental received 4,000 Jun 30 Bal c/d 4,000
Financial year ended 30 June, premium for 1 month = RM650 Jul 1 Bal b/d 4,000
Prepaid = RM650 x 11 months = RM7,150
2. A Accrued salary Rent received Account
3. C Revenue earned – expenses incurred Year 1 RM Year 2 RM
4. A Jul 1 Acc rental received 2,000
5. A Jun 30 Cash 10,000
Year 2 Jun 30 Acc rental received 4,000
Section 2: Jun 30 SPL 12,000 (RM1,000 x 4)
Note to tutors: Kindly use two-stage method to illustrate your answers to 14,000 14,000
the students.
Accrued electricity Account
Question 1
Year 1 RM Year 1 RM
Prepaid advertising Account
Jul 1 Electricity 120 Jul 1 Bal b/d 120
Year 1 RM Year 1 RM
Jul 1 Bal b/d 1,280 Jul 1 Advertising 1,280
Electricity Account
Year 2 RM Year 1 RM
Jun 30 Cash 1,000 Jul 1 Acc electricity 120
Advertising Account
Year 2
Year 1 RM Year 2 RM
Jun 30 SPL 730
Jul 1 Prepaid advertising 1,280
Jun 30 Prepaid electricity 150
Year 2
1,000 1,000
Jun 30 Cash 600
Jun 30 Accrued advertising 200 Jun 30 SPL 2,080
(4xRM50) 2,080 2,080 Prepaid electricity Account
Year 2 RM Year 2 RM
Jun 30 Electricity 150 June30 Bal c/d 150
Accrued advertising Account
Year 2 RM Year 2 RM Jul 1 Bal b/d 150
June30 Bal c/d 200 June30 Advertising 200
Jul 1 Bal b/d 200

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 ABFA1153 FINANCIAL ACCOUNTING I 6

Question 2
(a) (iii) Commission received and related account
(i) Rent and related account
Prepaid rent Account (asset) Commission received in advance Account
Year 1 RM Year 2 RM Year 2 RM Year 1 RM
Sept 1 Bal b/d 4,400 Aug 31 Rent expenses 4,400 Aug31 Com. Rec’d 3,650 Sept1 Bal b/d 3,650

Commission received Account

Rent Account Year 2 RM Year 2 RM
Year 2 RM Year 2 RM Aug31 SPL 4,000 Aug31 Com rec in advance 3,650
Aug31 Prepaid rent 4,400 “ Com Receivable 350
“ Accrued rent 400 Aug31 SPL 4,800 4,000 4,000
4,800 4,800
Commission Receivable Account
Accrued rent Account Year 2 RM Year 2 RM
Year 2 RM Year 2 RM Aug31 Com received 350 Aug 31 Bal c/d 350
Aug31 Bal c/d 400 Aug31 Rent expenses 400 Sept1 Bal b/d 350
Sept 1 Bal b/d 400

(iv) Rental received and related account

(ii) Insurance and related account
Prepaid insurance Account Rental received in advance Account (lia)
Year 1 RM Year 2 RM Year 2 RM Year 1 RM
Sept1 Bal b/d 1,600 Aug 31 Insurance 1,600 Aug31 Rental received 6,000 Sept 1 Bal b/d 6,000
Year 2 Year 2
“ Insurance 300 “ Bal c/d 300 “ Balc/d 1,200 Aug31 Rental received 1,200
Year 2 1,900 1,900 [6,000/12 x 3] 7,200 7,200
Sept1 Bal b/d 300 Sept 1 Bal b/d 1,200

Insurance Account Rental received Account

Year 2 RM Year 2 RM Year 2 RM Year 2 RM
Aug31 Prepaid insurance 1,600 Aug31 Prepaid insurance 300 Aug31 SPL 4,800 Aug31 Rent rec’d in adv 6,000
“ SPL 1,300 Rent rec’d in adv 1,200
1,600 1,600 6,000 6,000

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 ABFA1153 FINANCIAL ACCOUNTING I 7

(b) (c)
Smith Smith
SPL for the year ended 31 August SFP as at 31 August
RM RM RM RM RM
Sales 40,900 Non-current assets
Less: Cost of goods sold Motor vehicle at cost 9,000
Opening Inventories 8,200 Less: Accumulated depreciation (1,200+1,800) (3,000)
Purchases 26,000 6,000
34,200 Current assets
Less: Closing Inventories (9,100) (25,100)
Inventories 9,100
Gross Profit 15,800
Trade receivables 1,160
Add: Income Prepaid insurance 300
Commission received (3,650+350) 4,000 Commission receivable 350
Rental received (6,000-1,200) 4,800 8,800 Bank 1,500 12,410
24,600 18,410
Less: Expenditure
Rent (4,400 + 400) 4,800 Equity
Insurance (1,600 - 300) 1,300 Capital as at 1 September 19,700
Salary 9,990 Add: Net Profit 6,710
Depn: motor vehicle (9,000 x 20%) 1,800 (17,890)
26,410
Net Profit 6,710
Less: Drawings (11,700)
Capital as at 31 August 14,710

Current liabilities
Trade payables 2,100
Accrued rent 400
Rental received in advance 1,200 3,700
18,410

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 ABFA1153 FINANCIAL ACCOUNTING I 8

Section 3: Extra exercise questions

Question 1
Commission Account Prepaid insurance Account
RM RM RM
Mar31 Bank 7,000 Dec31 Insurance 4,000
July3 Bank 8,000
Oct 5 Bank 7,500
Dec31 Acc Commission 9,000 Dec31 SPL 31,500 Journal Entries
31,500 31,500 Date Dr Cr
RM RM
Accrued commission Account Dec 31 Dr Prepaid insurance (asset) 4,000
RM Cr Insurance 4,000
Dec 31 Bal c/d 9,000 Dec31 Commission 9,000 (Insurance paid for the next financial year)

Dec 31 Dr SPL (expenses) 20,000

Journal Entries Cr Insurance 20,000
Date Dr Cr (Insurance account closed)
RM RM
Dec 31 Dr Commission 9,000
Cr Accrued commission 9,000
(Commission not yet paid)
Question 3
Dec 31 Dr SPL 31,500 Interest received Account
Cr Commission 31,500 RM RM
(Commission account closed) Dec31 SPL 2,500 Aug31 Bank(60kx5%1/2 1,500
(March-Aug)
Dec31 Interest receivable 1,000
(60k x 5% x 4/12)
(sep – dec)
Question 2
Insurance Account 2,500 2,500
RM RM
Mar1 Bank(Mar,Apr,May) 6,000 Dec31 SPL 20,000
July3 Bank(Jun,Jul,Aug) 6,000 “ Prepaid in 4,000 Interest receivable Account
Aug28 Bank(Sep,Oct,Nov) 6,000 (Jan & Feb) RM
Dec8 Bank(Dec, Jan,Feb) 6,000 Dec31 Interest received 1,000
24,000 24,000

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 ABFA1153 FINANCIAL ACCOUNTING I 9

Journal Entries
Date Dr Cr Question 5
RM RM
Dec 31 Dr Interest receivable (asset) 1,000 (a) i)
Cr Interest received 1,000 Salary Account
(Interest not yet received) RM RM
Dec31 Bank 15,000 Jan1 Accrued salary 1,500
Dec 31 Dr Interest received 2,500 Accrued Salary 4,500 Dec31 SPL 18,000
Cr SPL 2,500 19,500 19,500
(Interest account closed)

ii)
Question 4 Insurance Account
Rent received Account RM RM
RM RM Jan1 Prepaid Insurance 700 Dec31 SPL 8,400
Dec31 SPL 16,000 May1 Bank(May,June,Jul) 6,000 Dec31 Bank 9,100 Dec31 Prepaid insurance 1,400
Rent rec'd in 9,800 9,800
adv 2,000 Aug1 Bank(Aug,Sept,Oct) 6,000
Nov1 Bank(Nov,Dec,Jan) 6,000
18,000 18,000 iii)
Utility Account
Rent received in advance Account RM RM
RM Dec31 Bank 7,500 Jan1 Accrued Utility 1,000
Dec31 Rent received 2,000 SPL 6,000
Dec31 Prepaid Utility 500
7,500 7,500
Journal Entries
Date Dr Cr
RM RM iv)
Dec 31 Dr Rent received 2,000 Stationery Account
Cr Rent received in advance 2,000 RM RM
(Rent received for next financial year) Jan1 Prepaid stationery 900 Dec31 SPL 3,600
Dec31 Bank 2,400
Dec 31 Dr SPL 16,000 “ Accrued Stationery 300
Cr Rent received 16,000 3,600 3,600
(Rent received account closed)

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 ABFA1153 FINANCIAL ACCOUNTING I 10

v) (b)
Commission received Account Pentax Enterprise
RM RM SPL(extract) for the year ended 31 December
Jan1 Accrued Com. Rec’d 900 Dec31 Bank 5,850 RM
Accrued Com. Gross Profit xxx
Dec31 SPL 5,400 Dec31 Rec’d 450
6,300 6,300 Add: Income
Commission 5,400
Rent 12,000
Interest 4,200
vi)
Rent received Account Less: Expenditure
RM RM Salary 18,000
Dec31 SPL 12,000 Jan1 Accrued rental rec’d 1,000 Insurance 8,400
Rental rec’d in adv. 2,000 Dec31 Bank 13,000 Utility 6,000
Stationery 3,600
14,000 14,000

Pentax Enterprise
SFP (extract) as at 31 December
vii) RM RM
Interest received Account Current assets
RM RM Prepaid insurance 1,400
Jan1 Accrued int. Rec’d 350 Dec31 Bank 5,600 Prepaid utility 500
Dec31 SPL 4,200 Accrued commission 450
“ Rental rec’d in adv. 1,050
5,600 5,600
Current liabilities
Accrued salary 4,500
Accrued stationery 300
Rent received in advance 2,000
Interest received in advance 1,050

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