question 4 CTSha Sdn. Bhd., a local business involved in the manufacturing of plastic, metal and other moulds for a wide variety of industrial customers, had the following balances extracted from its books on 31 December 2020. Name of Account RM WIP - Raw materials, 1 January 2020 14,630 WIP - Factory wages, 1 January 2020 18,330 WIP - Factory overhead, 1 January 2020 21,660 Raw materials, 1 January 2020 36,700 Raw materials purchases 251,340 Transportation of raw materials 8,340 Custom duties on raw materials 9,600 Insurance on raw materials 3,500 Factory wages 285,430 Group accident insurance on factory workers 12,340 Depreciation of plant and factory machinery 48,000 Oils and lubricants 5,700 Factory supervisor's wages 30,400 Factory cleaner’s wages 12,300 Factory security's staff salaries 18,600 Factory repairs and maintenance 9,560 Factory insurance expense 8,400 Sales returns 23,000 Finished goods, 1 January 2020 75,380 Advertising expense 37,630 Salesmen’s commissions 35,480 Salesmen’s salaries 64,570 Selling expenses 11,220 Office wages & salaries 73,580 Office insurance expense 5,870 Depreciation of office furniture 3,500 Discounts allowed 22,460 Bad debts expense 32,760 Rent expenses 180,000 Manager’s salary 99,000 Utilities 40,800 Depreciation of motor vehicles 44,000 General expenses 22,500 Pilferage of raw materials 1,400 Returns of raw materials 5,600 Sales 2,854,200 Discount received 23,460 Interest on fixed deposits 15,000 Additional information: On 31 December 2020, the following estimates were made: (i) Rent – two-thirds of the rent is for the factory while the rest is for the office. (ii) Manager’s salary – one-third is for the factory while the rest is for the office. (iii) Utilities – RM4,800 of the utilities is estimated to be for the office use. (iv) Depreciation of motor vehicles – RM36,000 of this considered to be for use by the factor and the rest for the office. (v) General expense – one-third of the amount is considered to be for office use while the rest is for use in the factory. (vi) Inventory of raw materials – RM15,420. (vii) WIP, raw materials – RM13,690. (viii) WIP, factory wages – RM16,320. (ix) WIP, factory overhead – RM28,850. (x) Inventory of finished goods was valued at RM95,000. Required: b) Prepare statement of comprehensive income for the year ended 31 December 2020.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
question 4
CTSha Sdn. Bhd., a local business involved in the manufacturing of plastic, metal and other moulds for a wide variety of industrial customers, had the following balances extracted from its books on 31 December 2020.
|
Name of Account |
RM |
|
WIP - Raw materials, 1 January 2020 |
14,630 |
|
WIP - Factory wages, 1 January 2020 |
18,330 |
|
WIP - Factory |
21,660 |
|
Raw materials, 1 January 2020 |
36,700 |
|
Raw materials purchases |
251,340 |
|
Transportation of raw materials |
8,340 |
|
Custom duties on raw materials |
9,600 |
|
Insurance on raw materials |
3,500 |
|
Factory wages |
285,430 |
|
Group accident insurance on factory workers |
12,340 |
|
|
48,000 |
|
Oils and lubricants |
5,700 |
|
Factory supervisor's wages |
30,400 |
|
Factory cleaner’s wages |
12,300 |
|
Factory security's staff salaries |
18,600 |
|
Factory repairs and maintenance |
9,560 |
|
Factory insurance expense |
8,400 |
|
Sales returns |
23,000 |
|
Finished goods, 1 January 2020 |
75,380 |
|
Advertising expense |
37,630 |
|
Salesmen’s commissions |
35,480 |
|
Salesmen’s salaries |
64,570 |
|
Selling expenses |
11,220 |
|
Office wages & salaries |
73,580 |
|
Office insurance expense |
5,870 |
|
Depreciation of office furniture |
3,500 |
|
Discounts allowed |
22,460 |
|
|
32,760 |
|
Rent expenses |
180,000 |
|
Manager’s salary |
99,000 |
|
Utilities |
40,800 |
|
Depreciation of motor vehicles |
44,000 |
|
General expenses |
22,500 |
|
Pilferage of raw materials |
1,400 |
|
Returns of raw materials |
5,600 |
|
Sales |
2,854,200 |
|
Discount received |
23,460 |
|
Interest on fixed deposits |
15,000 |
Additional information:
On 31 December 2020, the following estimates were made:
(i) Rent – two-thirds of the rent is for the factory while the rest is for the office.
(ii) Manager’s salary – one-third is for the factory while the rest is for the office.
(iii) Utilities – RM4,800 of the utilities is estimated to be for the office use.
(iv) Depreciation of motor vehicles – RM36,000 of this considered to be for use by the factor and the rest for the office.
(v) General expense – one-third of the amount is considered to be for office use while the rest is for use in the factory.
(vi) Inventory of raw materials – RM15,420.
(vii) WIP, raw materials – RM13,690.
(viii) WIP, factory wages – RM16,320.
(ix) WIP, factory overhead – RM28,850.
(x) Inventory of finished goods was valued at RM95,000.
Required:
- b) Prepare statement of comprehensive income for the year ended 31 December 2020.
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