EXERCISE TOPIC 9&10

1. Lily Sdn Bhd purchased an a equipment for RM150,000. Transportation charges

amounted to RM4,500 and there was a cost of RM13,000 for building a
foundation and installing the equipment. The company pay RM1,200 a year for
fire insurance of the equipment. It is estimated that the equipment will have a
RM25,000 residual value at the end of its 5 years useful life. Depreciation
expense each year using the straight-line method will be
A. RM28,740. B. RM28,500.
C. RM25,000. D. RM25,900.

2. Bella Company purchased a machine for RM480,000 on 1 March 2018. It is

estimated that the equipment will have a RM40,000 residual value at the end of
10 years’ useful life. The depreciation rate is 40%. If the company uses the
declining-balance method on monthly basis, the amount of annual depreciation
recorded for 2019 would be (assuming the financial year ends on 31 December
every year)
A. RM128,000. B. RM115,200.
C. RM121,600. D. RM160,000.

3. On 1 July 2020, Perniagaan Kencana sells equipment for RM95,000. The

equipment purchase cost RM300,000, had an estimated 5 years’ useful life and
an expected residual value of RM35,000. The accumulated depreciation account
had a balance of RM170,000 on 31 December 2019, using the straight-line
method. Journal entry to record the disposal of the equipment will include a
A. credit to equipment of RM95,000.
B. debit to loss on disposal of RM8,500.
C credit to cash of RM95,000.
.
D debit to accumulated depreciation of RM170,000.
.

4. On 1 May 2020, White Co. exchange an old machine that originally cost
RM96,000 when purchased on 1 January 2016 with a new machine. Cost of the
new machine is RM125,000 and the company paid RM55,000. The old
equipment was depreciated at 10% annually on yearly basis. The gain or loss on
disposal is

A. RM600 loss. B. RM2,600 loss.

C. RM15,600 gain. D. RM12,400 gain.
5. On 1 January, Better Bank agrees to lend Abu Company RM200,000, 8%, 9
month notes payable. The journal entry on 1 October to record the payment of
the notes payable on maturity date is (assuming the financial year ends on 31
December every year)
A. Dr. Notes Payable RM212,000
Cr. Bank RM212,000
B. Dr. Notes Payable RM200,000
Interest Expense RM9,333
Interest Payable RM2,667
Cr. Bank RM212,000
C. Dr. Notes Payable RM200,000
Interest Payable RM12,000
Cr. Bank RM212,000
D. Dr. Notes Payable RM200,000
Interest Expense RM12,000 RM212,000
Cr. Bank

6. A retail store does not segregate sales and the amount of sales tax on sales. If
the sales tax rate is 5% and the register total amounted to RM136,500, what is the
amount of the sales to be recorded?
A. RM6,500. B. RM129,675.
C. RM130,000 D. RM160,000.

7. Amelia Company collected rental revenue of RM12,000 for 3 months beginning

1 Dec 2020. What amount should report as a current liability for Unearned
Rental Revenue at 31 December 2020?
A. RM12,000. B. RM8,000.
C. RM4,000. D. RM3,000.

8. Cemerlang Bhd. issued a bond RM5,000,000, 6% on 1 July 2019 for 10 years.

Interest payments are made every 1 January and 1 July. Accounting period
ended on 31 December every year. What is the journal entry to record interest
payment on 1 January 2020?
A. Dr. Interest expense RM150,000, Cr. Bank RM150,000
B. Dr. Interest payable RM150,000, Cr. Bank RM150,000
 C Dr. Interest expense RM150,000, Cr. Interest payable RM150,000
.
D Dr. Interest expense RM300,000, Cr. Bank RM300,000
.

9. Cemerlang Bhd. issued a bond RM5,000,000, 6% on 1 July 2019 for 10 years.

Interest payments are made every 1 January and 1 July. Accounting period
ended on 31 December every year. What is the journal entry to record interest
payment on 1 July 2020?
A. Dr. Interest expense RM150,000, Cr. Bank RM150,000
B. Dr. Interest payable RM150,000, Cr. Bank RM150,000
C Dr. Interest expense RM150,000, Cr. Interest payable RM150,000
.
D Dr. Interest expense RM300,000, Cr. Bank RM300,000
.