2019 Commercial 2 Bookkeeping Test (4)

Mr. Tan, a retailer, does not keep a full set of accounts. However, the following information was
obtained for the year 2018:
(i) Mr. Tan pays all cash received into bank and makes all payments by cheque. A summary of his
bank account for the year is shown below:
Bank
RM RM
Balance as at 1 January 2018 18,400 Account Payable 11,840
Account Receivable 30,000 Wages 9,000
Cash Sales 7,840 Water And Electricity 6,716
Sale Of Motor Vehicles 6,000 Drawings 14,400
Insurance [Note (V)] 2,000
Rental Expenses 3,300
Balance as at 31 December 2018 14,984

(ii) Additional information:

1 January 2018 31 December 2018
RM RM
Inventory 3,200 3,450
Motor Vehicles 30,000 ?
Accumulated Depreciation of Motor Vehicles 12,000 ?
Account Receivable 4,820 5,960
Allowance For Doubtful Debts 241 298
Account Payable 3,700 2,300
Accrued Rental -- 300
Accrued Water And Electricity 133 100

(iii) It is the company policy to provide the depreciation on non-current assets as follows:
Motor Vehicles 10% on straight line method
Full year is charged in the year of disposal

(iv) Mr. Tan sold one of his Motor Vehicles on 30 June 2018 which purchased on June 2014 at cost
price RM15,000.

(v) Mr. Tan had noted during the year that he had allowed discount of RM1,750 to account receivables
and discount received of RM3,000 from account payables.

(vi) Half the amount of insurance RM2,000 was paid for Mr. Tan’s life assurance.

You are required to:

a. Prepare the following ledger account:
1. Account Receivable 7. Motor Vehicle
2. Account Payable 8. Accumulated Depreciation of Motor Vehicles
3. Sales 9. Disposal of Motor Vehicles
4. Purchases
5. Drawings
6. Insurance
b. Income Statement (Trading section only)
Answer Guide:
Account Receivable
2018 RM 2018 RM
Jan 1 Balance b/d 4,820 Dec 31 Bank 30,000
Dec 31 Sales 32,890 31 Discount Allowed 1,750
31 Balance c/d 5,960
37,710 37,710
2019
Jan 1 Balance b/d 5,960

Account Payable
2018 RM 2018 RM
Dec 31 Bank 11,840 Jan 1 Balance b/d 3,700
31 Discount Received 3,000 Dec 31 Purchases 13,440
31 Balance c/d 2,300
17,140 17,140
2019
Jan 1 Balance b/d 2,300

Sales
2018 RM 2018 RM
Dec 31 Trading 40,730 Dec 31 Account Receivable 32,890
31 Bank 7,840
40,730 40,730

Purchases
2018 RM 2018 RM
Dec 31 Account Payable 13,440 Dec 31 Trading 13,440

Insurance
2018 RM 2018 RM
Dec 31 Bank 2,000 Dec 31 Drawings 1,000
31 Profit And Loss 1,000
2,000 2,000

Drawings
2018 RM 2018 RM
Dec 31 Bank 14,400 Dec 31 Capital 15,400
31 Insurance 1,000
15,400 15,400

Motor Vehicles
2018 RM 2018 RM
Jan 1 Balance b/d 30,000 Jun 30 Disposal Of Motor Vehicles 15,000
Dec 31 Balance c/d 15,000
30,000 30,000
2019
Jan 1 Balance b/d 15,000
 Accumulated Depreciation of Motor Vehicles
2018 RM 2018 RM
Jun 30 Disposal of Motor 7,500 Jan 1 Balance b/d 12,000
Vehicles
Dec 31 Balance c/d 7,500 Dec 31 Profit And Loss 3,000
15,000 15,000
2019
Jan 1 Balance b/d 7,500

Disposal of Motor Vehicles

2018 RM 2018 RM
Jun 30 Motor Vehicles 15,000 Jun 30 Accumulated Depreciation 7,500
30 Bank 6,000
30 Loss On Disposal 1,500
15,000 15,000

(b)
Mr. Tan
Income Statement (Extract)
For The Year Ended 31 December 2018
RM RM
Sales 40,730

Less: Cost Of Sales

Opening Inventory 3,200
Add: Purchases 13,440
16,640
Less: Closing Inventory (3,450) (13,190)
Gross Profit 27,540