BKAL 1013 BUSINESS ACCOUNTING

FIRST SEMESTER 2023/2024 (A231)

GROUP NAME:
GROUP A

PROJECT:
BUSINESS ACCOUNTING GROUP PROJECT

PREPARED FOR:
PROF. MADYA DR. RAFEAH BINTI MAT SAAT

PREPARED BY:
NAME NO.MATRIC

SITI FAIRUZ BINTI FADLI 295487

WONG HAO CHEN 297937

ADAM HAKIM BIN NORAZAM 298105

AMIRAH FARHANA BINTI SHAHRIL AFFANDI 298572

NURUL AYU FARHANA BINTI MOHD ASUAT 298576

DATE OF SUBMISSION:
6 JANUARY 2024
PART A_ANSWER

ZAL ENTERPRISE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
RM RM RM
Sale 1004928
(-) Sales Return and Allowance 3525
Sales Discount 7928
=SUM(F9:F10)
Net Sales =(G8-G11)
(-) Cost of Merchandise Sold 478940
Gross Profit =(G12-G13)
Operating Expenses
Selling Expenses:
Advertising Expense 30200
Utility Expenses 25870
Depre. Expense - Delivery Van 37888
Del. Van Repairs & Maintenance 8575
Sale Salaries Expense 85670
Sale Supplies Expense 8560
Total Selling Expenses =SUM(E17:E22)
Administrative Expenses:
Office Salaries Expense 25550
Office Supplies Expense 5680
Rental Expense 30500
Insurance Expenses 15600
Depre.Expenses-Office Equip 57750
Total Administrative Expenses =SUM(E25:E29)
(-)Total Operating Expenses =(F23+F30)
Income From Operating =(G14-G31)
(-)other Income and Expenses
Interest Expense 23123
Net Income =(G32-G34)

ZAL ENTERPRISE
STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
RM RM
Zal Ent, Capital, January 1, 2023 680000
Add:Net Income for the Year =G35
=SUM(F46:F46)
Less: Withdrawal 23500
Increase in Owner Equity =(F47-F48)
Zal Ent, Capital, 31 December, 2023 =(G45+G49)
 ZAL ENTERPRISE
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR 31 DECEMBER 2023
RM RM RM
ASSETS:
CURRENT ASSETS
Cash ='Cash Account'!F11
Account Receivable 145875
Merchandise Inventory 392813
Office Supplies 4000
Sale Supplies 6875
Pre-paid Insurance 72975
TOTAL CURRENT ASSET =SUM(F64:F69)
NON-CURRENT ASSETS
Long Term Investment 193978
Office Equipment 273750
(-) Accum.Depre. - Office Equip. 173250 =(E73-E74)
Delivery Van 378875
(-) Accum. Depre. - Delivery Van 227325 =(E75-E76)
TOTAL NON-CURRENT ASSET =SUM(F72:F76)
TOTAL ASSETS =(G70+G77)
LIABILITIES:
CURRENT LIABILITIES
Accounts Payable 309275
Salaries Payable 25000
Interest Payable 28125
Unearned Revenue 42009
Notes Payable 415088
TOTAL LIABILITIES =SUM(F81:F85)
OWNER'S EQUITY
Zalzalah Rashid, Capital =(G50)
TOTAL LIABILITIES AND OWNER'S EQUITY =(G86+G88)
 ZAL ENTERPRISE
CASH ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2023
DATE DESCRIPTION DEBIT (RM) KREDIT (RM ) BALANCE (RM)
45261 Opening Balance 554500
45291 Withdrawal 27500 =(F5-E6)
45291 Delivery Van 10000 =(F6+C7)
45291 Capital 150000 =(F7+C8)
45291 Land 180000 =(F8-E9)
45291 Sale 315000 =(F9+C10)
45291 Expenses 255000 =(F10-E11)

BALANCE AS OF 31-DEC-23: RM 567000

PART A_ANSWER

ZAL ENTERPRISE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
RM RM RM
Sale 1,004,928
(-) Sales Return and Allowance 3,525
Sales Discount 7,928
11,453
Net Sales 993,475
(-) Cost of Merchandise Sold 478,940
Gross Profit 514,535
Operating Expenses
Selling Expenses:
Advertising Expense 30,200
Utility Expenses 25,870
Depre. Expense - Delivery Van 37,888
Del. Van Repairs & Maintenance 8,575
Sale Salaries Expense 85,670
Sale Supplies Expense 8,560
Total Selling Expenses 196,763
Administrative Expenses:
Office Salaries Expense 25,550
Office Supplies Expense 5,680
Rental Expense 30,500
Insurance Expenses 15,600
Depre.Expenses-Office Equip 57,750
Total Administrative Expenses 135,080
(-)Total Operating Expenses 331,843
Income From Operating 182,692
(-)other Income and Expenses
Interest Expense 23,123
Net Income 159,569

ZAL ENTERPRISE
STATEMENT OF CHANGES IN OWNERS' EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
RM RM
Zal Ent, Capital, January 1, 2023 680,000
Add:Net Income for the Year 159,569
159,569
Less: Withdrawal 23,500
Increase in Owner Equity 136,069
Zal Ent, Capital, 31 December, 2023 816,069
 ZAL ENTERPRISE
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR 31 DECEMBER 2023
RM RM RM
ASSETS:
CURRENT ASSETS
Cash 567,000
Account Receivable 145,875
Merchandise Inventory 392,813
Office Supplies 4,000
Sale Supplies 6,875
Pre-paid Insurance 72,975
TOTAL CURRENT ASSET 1,189,538
NON-CURRENT ASSETS
Long Term Investment 193,978
Office Equipment 273,750
(-) Accum.Depre. - Office Equip. 173,250 100,500
Delivery Van 378,875
(-) Accum. Depre. - Delivery Van 227,325 151,550
TOTAL NON-CURRENT ASSET 446,028
TOTAL ASSETS 1,635,566
LIABILITIES:
CURRENT LIABILITIES
Accounts Payable 309,275
Salaries Payable 25,000
Interest Payable 28,125
Unearned Revenue 42,009
Notes Payable 415,088
TOTAL LIABILITIES 819,497
OWNER'S EQUITY
Zalzalah Rashid, Capital 816,069
TOTAL LIABILITIES AND OWNER'S EQUITY 1,635,566
 ZAL ENTERPRISE
CASH ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2023
DATE DESCRIPTION DEBIT (RM) KREDIT (RM ) BALANCE (RM)
01-Dec-23 Opening Balance 554,500
31-Dec-23 Withdrawal 27,500 527,000
31-Dec-23 Delivery Van 10,000 537,000
31-Dec-23 Capital 150,000 687,000
31-Dec-23 Land 180,000 507,000
31-Dec-23 Sale 315,000 822,000
31-Dec-23 Expenses 255,000 567,000

BALANCE AS OF 31-DEC-23: RM 567000

PART B_ANSWER

DATE PARTICULARS DEBIT(RM) CREDIT(RM)

DEC Depreciation Expenses-office equipment 35,000

31 Accumulated depreciation-office equipment 35,000
Depreciation Expenses-office equipment 35,000
35,000
Accumulated depreciation-office equipment
(Decrease in assets (accumulated depreciation) and
decrease in net income due to higher expenses.)

Salaries expenses 20,000

Salaries payable 20,000
(Increase in liabilities and decrease in net income due to
higher expenses.)

Office supplies expense (Office supplies used 5,380

[5680-300]).
Office Supplies 5,380
(Increase in assets and decrease in net income if the
supplies were already used but not accounted for.)

Unearned revenue 7,800

Revenue 7,800
(Net income will increase due to unearned revenue.)

Insurance expense 40,500

Pre-paid insurance 40,500
(Net income will decrease due to insurance expenses.)

Account receivable 24,400

Revenue 24,400
(Net income will increase due to revenue.)

Interest receivable 15,800

Interest revenue 15,800
(Net income will be increased due to interest revenue.)

Supplies expense 135,000

Account payable 135,000
(Net income will decrease due to supplies expense and
increase in liability.)
PART C:
Discuss the following situations from accounting and business perspectives.
With the rapid expansion of Zal Enterprise, Zalzalah Rashid is contemplating the idea of opening
more outlets at strategic locations in the city. However, opening more branches requires Zalzalah
Rashid to adopt new strategies to support the increased sales/revenue, credit management, and
improve account receivable collection and inventory management. An approach under
consideration is to re-evaluate the credit terms, and the shipping strategy would significantly
impact the accounts receivable collection and inventory management.

INSTRUCTIONS:
Based on the above situation, discuss and advise Zalzalah Rashid on the following:
1. The appropriate credit term to improve and increase sales/revenue, credit management,
accounts receivable collection, and inventory management.

2. The appropriate shipping term to improve and increase sales/revenue, credit management,
accounts receivable collection, and inventory management.

ANSWER:

1. Credit terms refer to the condition in which a seller extends credit to a buyer for the
purchase of goods or services. These terms state the payment terms including the credit
period, discounts for early payment, and any other conditions that both parties agree
upon. Credit terms are a crucial aspect of commercial transactions in providing a
framework for managing the timing of payments between buyers and sellers. The
appropriate credit term to improve increase sales/revenue, credit management, improve
accounts receivable collection and inventory management is Zal Enterprise can offer
extended credit periods to customers, such as "Net 45" or "Net 60," allowing customers
more time to pay. However, Zal Enterprise can introduce discounts for early payments,
for example, "2/10, Net 45" or "3/15, Net 60” to encourage quicker payments. This
strategy motivates customers to settle their invoices quicker, hence improving cash flow
and reducing the average collection period. Besides, Zal Enterprise can manage credit
risk effectively by adjusting credit limits based on their payment history and financial
stability. An increase in cash flow is often associated with inventory management
contributing to a positive impact on sales and revenue growth. The efficient management
of cash flow enables businesses to pay bills on time, hence reducing holding costs and
allowing for more agile adjustments to inventory levels. With improved cash flow,
businesses can implement effective inventory management strategies as an effective way
of optimizing the balance between supply and demand. This helps Zal Enterprise to react
faster to market changes, hence minimizing the risk of overstocking or stockouts and
enhancing overall operational efficiency. Furthermore, inventory managers need to
 determine when to reorder products to avoid stockouts. This involves establishing reorder
points and reorder quantities based on factors such as safety stock levels. As inventory
management becomes more efficient, customers can get their products more easily
therefore increasing customer satisfaction and loyalty.

2. Shipping terms refer to standard international trade terms which are used in contracts for
the sale of goods. These terms will determine the responsibilities between the buyer and
the seller regarding the delivery, risk, and costs related to the transportation of products.
The appropriate shipping term to improve increase sales/revenue, credit management,
accounts receivable collection, and inventory management is using FOB Shipping Point.
FOB means that the seller is responsible for delivering the products to the platform or
port in the shipment and after that, the buyer is responsible once the products are on the
ship, which means it becomes responsibility for the buyer. By using this strategy, Zal
Enterprise can transfer the risk of loss to the buyer as soon as the products are on
transportation at Zal Enterprise's location. Hence, this can accelerate revenue recognition
and minimize storage usage for a long time. Moreover, inventory managers must keep
inventory levels in check, hence businesses can reduce costs associated with holding
inventory, such as insurance, security, and potential losses due to any damage. Besides,
limited storage usage reduces the need for storage facilities and leads to lower holding
costs. As inventory management becomes more efficient, customers can get their
products more easily therefore increasing customer satisfaction and loyalty. Striking a
balance between providing flexibility to customers and implementing shipping strategies
will contribute to increased sales and efficient revenue.