Store Equipment Delivery Truck 6% per annum on cost 4% per annum on cost 2. During the year, RM8,500 worth of additional office supplies was purchased. A phy sical count of office suppliesonhandatthe end of the y earrevealed that RM6,400 worthofoffice supplies had been used during the year. 3. RR Bhd pays its factory personnel weekly wages amounting to RM10,000 for a five-day work, on Friday. Assum ing 31 December 2020, falls on Wednesday. 4. RR Bhd has rented a portion of an office build ing to multiple tenants. It has been determined that three tenants in the RM700 per month office and one tenant in the RMI,000 per month office had not paid the ir December rent as of 31 December. 5. RR Bhd borrowed RMS 1,000 from the bank signing a 10%, 6-month note on I December 2020. Principal and interest are payable to the bank on 1 June 2021. The transaction has been recorded except for accrued interest. 6. On 1 October 2020, RR Bhd purchased a general liability insurance policy for RM18,000 to provide coverage for 12 months. 7. On 1 December 2020, RR Bhd collected RM36,000 forconsultancyservices to be performed from I December 2020, through 31 May 2021. REQUIRED: (Show all your workings) (a) Prepare the adjusting entries on 31 Decembar 2020. (You may omit the explanation) (b) Prepare a Statement of Profit or Loss and Other Comprehensive Income for Rayyan Resources (RR) Bhd for the year ended 31 December 2020 according to MFRS 101 Presentation of Fina nc ial Statements. (c) Prepare a Statement of Financial Position for Rayyan Resources (RR) Bhd as at 31 December 2020 according to MFRS 101 Presentation of Financial State ments.
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
![Store Equipment
Delivery Truck
6% per annum on cost
4% per annum on cost
2. During the year, RM8,500 worth of additional office supplies was purchased. A phy sical
count of office suppliesonhandatthe end of the yearrevealed that RM6,400 worthofoffice
supplies had been used during the year.
3. RR Bhd pays its factory personnel weekly wages amounting to RM10,000 for a five-day
work, on Friday. Assum ing 31 December 2020, falls on Wednesday.
4. RR Bhd has rented a portion of an office building to multiple tenants. It has been determined
that three tenants in the RM700 per month office and one tenant in the RM1,000 per month
office had not paid their December rent as of 31 December.
5. RR Bhd borrowed RM5 1,000 from the bank signing a 10%, 6-month note on 1 December
2020. Principal and interest are payable to the bank on 1 June 2021. The transaction has
been recorded except for accrued interest.
6. On 1 October 2020,RR Bhd purchased a general liability insurance policy for RM18,000 to
provide coverage for 12 months.
7. On 1 December 2020, RR Bhd collected RM36,000 forconsultancyservices to be performed
from 1 December 2020, through 31 May 2021.
REQUIRED: (Show all your workings)
(a) Prepare the adjusting entries on 31 December 2020. (You may omit the explanation)
(b) Prepare a Statement of Profit or Loss and Other Comprehensive Income for Rayyan
Resources (RR) Bhd for the year ended 31 December 2020 according to MFRS 101
Presenta tion of Fina neial Statements.
(c) Prepare a Statement of Financial Position for Rayyan Resources (RR) Bhd as at 31
December 2020 according to MFRS 101 Presentation of Financial Statements.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad383bf9-3364-4483-9a13-ae4600888800%2Fe266a3fd-6312-4055-898f-5a907d9672b2%2Fn3agpwg_processed.jpeg&w=3840&q=75)
![QUESTION 2 (40 MARKS: 80 MINUTES)
The unadjusted trial balance of Rayyan Resources (RR) Bhd based in Kuala Lumpur contained
the following accounts on 31 December 2020, the end of the company's fiscal year.
Debit (RM)
212,300
Credit (RM)
Accounts
Bank
Accounts receivable
Office supplies
Prepaid insurance
Merchandise inventory
Land
Building
Accumulated depreciation-Building
Store equipment
Accumulated depreciation-Store equipment
Delivery truck
Accumulated depreciation- Delivery truck
Goodwill
Notes payable
Accounts payable
Uneamed revenue
Ordinary share capital
Capital reserves
Retained earnings
Rent revenue
Dividends
Sales
30,500
11,500
18,000
44,700
215,550
235,100
75,000
185,350
52,000
158,150
46,000
62,000
51,000
48,500
36,000
440,000
65,250
225,000
39,550
12,000
753,950
Sales returns and allowances
Cost of goods sold
Gain on revaluation of properties
Loss on sale of land
8,800
397,400
13,700
Salary and wages expenses
Advertising expenses
Utilities expense
Interest expense
Delivery expense
Repair expense
Income tax expenses
Total
20,400
140,000
24,400
14,000
20,000
16,700
12,100
7,000
1,845,950
1,845,950
Additional information on 31 December 2020:
1. RR Bhd has a calendar year-endaccounting period. The accounting policies related to the
depreciation of the assets are as follows:
NONCURRENT ASSET
Building
De precia tio n Rate
5% per annum on cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad383bf9-3364-4483-9a13-ae4600888800%2Fe266a3fd-6312-4055-898f-5a907d9672b2%2F0rppzhc_processed.jpeg&w=3840&q=75)
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