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Far160 (CT April 2019) Question

This document is a confidential exam paper for a Financial Accounting 2 course. It consists of two questions testing students' knowledge of partnership accounting, share and debenture transactions, and preparing related financial statements. The first question has multiple parts requiring calculations and statements related to partnership transactions. The second question requires journal entries for share and debenture issuances and extracts of the statement of financial position.

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Farah Husna
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119 views4 pages

Far160 (CT April 2019) Question

This document is a confidential exam paper for a Financial Accounting 2 course. It consists of two questions testing students' knowledge of partnership accounting, share and debenture transactions, and preparing related financial statements. The first question has multiple parts requiring calculations and statements related to partnership transactions. The second question requires journal entries for share and debenture issuances and extracts of the statement of financial position.

Uploaded by

Farah Husna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CONFIDENTIAL 1 AC/APR 2019/FAR160

UNIVERSITI TEKNOLOGI MARA


COMMON TEST

COURSE : FINANCIAL ACCOUNTING 2


COURSE CODE : FAR160
EXAMINATION : APRIL 2019
TIME : 1 HOUR 30 MINUTES

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of TWO (2) questions:

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page

3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4. Please check to make sure that this examination pack consists of :

i) the Question Paper


ii) an Answer Booklet – provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO


This examination paper consists of 4 printed pages

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL


CONFIDENTIAL 2 AC/APR 2019/FAR160

QUESTION 1

A. Asmah, a sole proprietorship wishes to form a partnership. She seeks your advice on
what should be written in the partnership agreement. List any three (3) items stated
in partnership agreement
(3 marks)

B. Suri and Liam are partners in Ombaq Enterprise sharing profit and losses in the ratio
of 4:2 respectively. The partnership agreement provides each partner 9% per annum
interest on capital and 8% per annum interest on drawings. The capital and current
statement balances for the partners as at 31 December 2017 were as follows:

Capital Current
RM RM
Suri 35,000 8,000
Liam 15,000 3,000

During the year 2018, the following transactions took place:

1. On 1 September 2018, Miqa was admitted as a new partner. She contributed


RM40,000 for her capital and another RM12,000 for goodwill by cheque. The
details of the new partnership agreement were as follows:
i. Interest on drawings 6% per annum.
ii. No interest on capital.
iii. Profits and losses will be shared equally.
iv. Miqa was entitled to a salary of RM1,500 per month.

2. On 1 September 2018 the assets’ value were as below:

Carrying value New value


RM RM
Land 40,000 78,000
Fixtures and fittings 8,000 5,500
Inventories 14,000 11,800

3. Goodwill was valued at RM36,000. The goodwill account will not be


maintained in the partnership books.

4. Drawings made by partners were as follows:

Amount (RM) Date


Suri 12,000 1 February 2018
Liam 8,000 31 August 2018
Miqa 1,600 1 October 2018

5. Net profit for the year ended 31 December 2018 was RM120,000 and it was
assumed that this profit had accrued evenly throughout the year.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL


CONFIDENTIAL 3 AC/APR 2019/FAR160

Required:

a) Goodwill statement as at 1 September 2018.


(3 marks)

b) Revaluation statement as at 1 September 2018.


(3 marks)

c) Appropriation statement showing the pre and post periods for the year ended
31 December 2018.
(7 marks)

d) Partner’s Capital Statement and Partner’s Current Statement for the year
ended 31 December 2018.
(9 marks)
(TOTAL: 25 marks)

QUESTION 2

A. List THREE (3) differences between ordinary shares and debentures.


(3 marks)

B. Golden Rod Bhd has been in the business selling motor vehicles for several years.
The financial statement of Golden Rod Bhd as at 31 December 2017 is provided
below:

Golden Rod Bhd


Statement of Financial Position as at 31 December 2018
RM
Non-current Assets 5,280,000
Current assets (including bank) 2,280,000
7,560,000
Equity & Liabilities
1,800,000 ordinary shares 2,700,000
1,200,000 8% preference shares 2,400,000
5,100,000
Reserves
Retained earnings 1,320,000
General reserves 360,000

Current liabilities 780,000


7,560,000

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL


CONFIDENTIAL 4 AC/APR 2019/FAR160

The following transactions took place during the year ended 31 December 2018:

1. On 1 February 2018, in order to finance a new project, the company decided


to issue 800,000 new ordinary shares at RM2.20 each. Applications received
were oversubscribed by 200,000 units. Excess application monies were
refunded.

2. At the same date, 400,000 units of 8% preference shares were also offered to
the public at RM2.60 each. The applications were undersubscribed by
100,000 units.

3. A bonus issue was made to the existing shareholders who held the ordinary
shares as at 31 December 2018. The basis of the bonus issue was one (1)
ordinary share for every twenty (20) shares held. Retained Profit reserve was
used for this purpose.

4. On 1 October 2018, the company issued RM200,000 7% Debentures at 95


with an issuance cost incurred of RM10,000. The effective interest rate is
10% and the interest was paid at the end of the accounting period. This
debenture is carried at amortised cost.

Required:

a) Prepare the relevant journal entries to record all the above transactions for
the year ended 31 December 2018. (Narration are not required)
(15 marks)

b) Prepare an extract of Statement of Financial Position (extract) as at 31


December 2018 (Equity and Liabilities sections only).
(7 marks)
(TOTAL: 25 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

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