BBM20503 Basic Accounting Paper
BBM205/03 Basic Accounting
Course Assignment (25%)
Semester 1, January 2022
1. This is an individual assignment and it covers knowledge acquired from Unit 1 to Unit 5.
2. There are five (5) practice questions in this assignment. Please answer ALL questions. Total marks awarded for CA is 100, which will contribute to 25% of the entire course assessment.
3. Evidence of plagiarism or collusion will be taken seriously and the University regulations will be applied strictly, henceforth please be familiar with the University’s definitions of plagiarism and collusion. You should not share your answers with others because any evidence of plagiarism or collusion found may result in ZERO mark being awarded to all involved and further disciplinary action taken.
4. For CA submission, please attach (using “Insert Object”) your CA and submit
through the Online Assignment Submission (OAS) system. Make sure you check your WOU email after you have submitted your CA as you will be notified in your WOU email if there is a failure of submission or file corruption.
5. Your assignment will be assessed on the factual answer provided based on your reading and analysis from various references related to this course. In addition, you should demonstrate a sound knowledge of the topics covered and adhere to the proper referencing technique.
6. Please follow the format provide by the University for your cover page.
7. Please name and save your CA according to the following guideline: __CA.doc
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Answer ALL questions below. Question 1 The unadjusted trial balance and the adjustment data for Robin Training Institute are given below along with adjusting entry information. Robin Training Institute Unadjusted Trial Balance as at 31 August 2021
Accounts receivable 59,000
Prepaid insurance 12,000
Accumulated depreciation for equipment 2,000
Accumulated depreciation for buildings 17,500
Unearned rent 16,000
Bank loan 50,000
Fees earned 97,400
Repairs and maintenance 5,000
Interest expense 4,000
Total 298,500 298,500
i. The Prepaid Insurance account consists of a payment for one year policy. An analysis of the insurance invoice indicates that one half of the policy has expired by the end of the 31 August year-end.
ii. A cash payment for space sublet for 8 months was received on 1 March and was credited to Unearned Rent.
iii. Accrued interest expense on the loan of RM1,000 has been incurred but not paid.
Required: If these adjustments are not recorded,
a. Show and explain the impact on net income with calculation without the adjustments and with the adjustments. (11 marks)
b. Explain the accounting principles that are being violated if the adjustments are not made. (4 marks)
Question 2 Johan started a new business, and completed the following transactions during its first month of
i. Johan invests RM80,000 cash in the business by depositing the money in the
ii. The company purchased a piece of land for RM52,000 by cheque.
iii. The company also purchased a building for RM36,000 to use as an office, paying
RM6,000 by cheque and a loan from Maybank for the remaining RM30,000.
iv. Purchased tools and equipment on account, RM13,800
v. Sold some of the tools at a price equal to their cost, RM1,800, collectible within45
vi. Received RM600 in partial collection of the account receivable from the sale of
vii. Paid RM6,800 in partial payment for the tools and equipment purchased on
To record the transactions using the Accounting Equation. (15 marks)
Question 3 A company made the following merchandise purchases and sales during the month of May with the assumption that there was no beginning inventory:
Date Activities Units Acquired at
Units Sold at Retail
1 May Purchased 300 units at RM15/unit
3 May Purchased 270 units at RM20/unit
8 May Sold 500 units at RM55/unit
12 May Purchased 300 units at RM24/unit
14 May Sold 250 units at RM55/unit
23 May Purchases 250 units at RM30/unit
25 May Purchases 800 units at RM25/unit
31 May Sales 900 units at RM55/unit
a. Compute the value of the inventory a s at 31 M a y 2021 b y using t h e f i r s t – i n , f i r s t o u t ( F I F O ) m e t h o d . (13 marks)
b. State the value of purchases, cost of goods sold and sales. (2 marks) Question 4 The following information is available for the Avira Language Center for the month of September 2021.
i. On 30 September, after all transactions have been recorded, the balance in the company’s Bank account has a balance of RM27,202.
ii. The company’s bank statement shows a balance on 30 September of RM29,279. iii. Outstanding cheques at 30 September include cheque number 3030 in the
amount of RM1,525 and cheque number 3556 in the amount of RM1,459. iv. A credit memo included with the bank statement indicates that the bank collected
RM780 on a noninterest-bearing note receivable for Avira. The bank deducted a RM10 collection fee, and credited the remainder of RM770 to Avira’s account.
v. A debit memo included with the bank statement shows a RM67 NSF check from a customer, Mr Brown.
vi. A deposit placed in the bank’s night depository on 30 September totaled RM1,675, and did not appear on the bank statement.
vii. Examination of the cheques on the bank statement with the entries in the accounting records reveals that cheque number 3445 for the payment of an account payable was correctly written for RM2,450, but was recorded in the accounting records as RM2,540.
viii. Included with the bank statement was a debit memorandum in the amount of RM25 for bank service charges. It has not been recorded on the company’s books.
Required: a. Prepare the September bank reconciliation for the Avira. (10 marks)
b. Prepare the general journal entries to bring the company’s book balance of bank
into conformity with the reconciled balance as of September 30 2021. (5 marks)
Question 5 The following is the trial balance for Tatt Trading as at 31 October 2021:
Trade receivables 18,910
Trade payables 22,520
Inventory at 31 October 2020 40,360
Buildings at cost 70,000
Equipment at cost 45,000
Profits b/d 27,000
Capital – 70,000
Carriage inwards 2,070
Carriage outwards 1,890
Rates and occupancy expenses 4,735
Repair and maintenance 3,522
Sundry expenses 1,896
Provision for doubtful debts 500
Accumulated depreciation at 31 October 2020:
i. Inventory at 31 October 2021 amounted to RM55,000. ii. Repairs and maintenance owing RM222, sundry expenses owing RM196. iii. Salary accrued amount to RM1,310. iv. RM900 is provided for doubtful debts. v. Depreciation on cost: Buildings 2 per cent; Equipment 10 per cent.
Required: Prepare the Statement of Comprehensive Income for the year and the Statement of Financial Position for Tatt Trading as at 31 October 2021. (Total: 40 marks)
END OF QUESTION PAPER